Posted by John Merchant on April 23, 2004 at 10:24:40:
No such thing as deed that “automatically reverted” to you in 6 months, etc.
I’d run this by your lawyer before agreeing to anything with Jack. He may or may not have your best interests at heart, and I pick up a scent of a con-game here.
First he’d have to prove to any lender that HE is the owner, and if he has secret deal with YOU, he’d be committing felony fraud by failing to disclose details of his deal with you.
Need advice on deeding a property - Posted by Bill Sackett
Posted by Bill Sackett on April 23, 2004 at 09:47:35:
Hi,
I own a property on which I have an outstanding mortgage balance. I believe that the balance of the loan is greater than the value of the property. An acquaintance of mine (I’ll call him Jack) wants me to deed him the property for a period of 3 months, during which he will renovate it. Upon receipt of the deed, he would give me funds equal to 3 months of loan payments (for the mortgage that I am still liable for). After finishing renovation, he plans to obtain a loan to pay me enough so that I can pay off the balance of my mortgage. He would obtain the loan by borrowing against the renovated property.
I have a few questions: (1) Is this legal? (2) If this is legal, is it possible to give Jack a deed that would revert back to me if he did not follow through with his promise to renovate the property and pay me in full?
Thank you for any advice.
Re: Need advice on deeding a property - Posted by eric
Posted by eric on April 27, 2004 at 10:38:17:
This plan makes absolutely no sense. Why wouldn’t you just renovate the property and then re-finance it? “Jack” will not be able to obtain a loan against the prperty if there is already an encumberance that is greater than the FMV of the property. Whether you transfer the property to someone else or not, it is still encumbered by the loan.
This one does not pass the “smell test.”