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I am trying to prevent a possible situation when two individuals
purchase a house and one of them cant or wont continue to pay their
share of the mortgage.
Are there any contracts that could prevent this (tenancy in common, two
separate mortages, etc) and are there any legal means to remedy it?
The goal is to avoid being forced to sell the house, and allow the one
who continues to pay to become the sole owner.
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In article <ptev2114qh2dmkh21efhf9k0iqkjjh8mpe@4ax.com>,
nymphetamine@mail.com wrote:
I am trying to prevent a possible situation when two individuals
purchase a house and one of them cant or wont continue to pay their
share of the mortgage.
Are there any contracts that could prevent this (tenancy in common, two
separate mortages, etc) and are there any legal means to remedy it?
The goal is to avoid being forced to sell the house, and allow the one
who continues to pay to become the sole owner.
The problem is that it is way too late for a contract. The
contract had to be in place prior to buying the house. As
a result, you now have a contract called a mortgage and a
note.
What this means is that if one person cannot pay, the other
either pays, or loses the house and gets their credit record
destroyed. And even if only one party makes all the payments,
the other party is still legally 1/2 owner.
Some states might have some special laws that covers this. You
would have to get legal advise on it in your specific area.
The best advice is to never, ever buy a house with a 2nd party
unless you are married to that party. Even then, the marriage
goes sour 50% of the time, so it is still an iffy game to play.
-john-
--
======================================================================
John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
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nymphetamine@mail.com wrote:
I am trying to prevent a possible situation when two individuals
purchase a house and one of them cant or wont continue to pay their
share of the mortgage.
Are there any contracts that could prevent this (tenancy in common, two
separate mortages, etc) and are there any legal means to remedy it?
You CANT prevent it. You cant force them to pay.
The contracts are to protect the bank, not you.
The goal is to avoid being forced to sell the house, and allow the one
who continues to pay to become the sole owner.
Buy out their interest ie take on the whole mortgage yourself.
But if you do that why get involved with the other party in the first place?
You may try to word the contract so you can sue the other party.
gtoomey
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In article <ptev2114qh2dmkh21efhf9k0iqkjjh8mpe@4ax.com>,
<nymphetamine@mail.com> wrote:
I am trying to prevent a possible situation when two individuals
purchase a house and one of them cant or wont continue to pay their
share of the mortgage.
Are there any contracts that could prevent this (tenancy in common, two
separate mortages, etc) and are there any legal means to remedy it?
The goal is to avoid being forced to sell the house, and allow the one
who continues to pay to become the sole owner.
This is a *messy* subject.
There are two separate issues involved.
1) the ownership interest in whatever equity there is in the property.
2) the mortgage lender action on any change in ownership.
A contract between the two individuals, providing that one individual may
_involuntarily_ buy out the other one in the event of failure to make
a timely payment -- with the buy-out price based on, say, the cumulative
amount of the portion of payments _made_ that was 'applied to principal
reduction' -- takes care of the ownership interest. Of course, if the
predicate situation is that one party "won't" make the payment (vs. "can't")
then that party is 'unlikely' to co-operate in executing the necessary
documents for the transfer of ownership, per the contract. Thus, one
may end up in court to compel specific performance.
HOWEVER, the mortgage lender almost assuredly has a 'due on sale' clause
in the mortgage which would then come into play, and require re-financing
the outstanding balance. *ASSUMING* that the 'buying' individual could get
financing for the _entire_ outstanding mortgage balance, that is. This
probably involves new application fees, a new appraisal, paying 'points'
on originating the new loan, etc., etc., ad nauseum.
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