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Thread: Probate?

  1. #1
    Pamela
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    Default Probate?

    I have a gf whos parents passed away a year ago, pretty much the same time. Her mother left the house to her, well the papers say my friend is Exucator of the estate. She's paying the Morgage but falling behind, lights are off, water is getting turned off etc. A mess!

    First can Florida Power & Light put a lien on the house, she owes over $1,000 to them. And is way behind on home owners insurance....but keeps paying Mortgage and is two months behind on this....

    My roomate says she needs to go to court and get this house put in her name? Probate?

    She just got a job, but slowly is losing it all. How can she start to save the home? Which bills would be most important to not lose the house?

    Thanks.

  2. #2
    Banned Katrine's Avatar
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    Default Re: Probate?

    If she has it put in her name then the ownership will transfer to her and she will screw up her credit. Each state has different homestead protection laws. Many will not let most creditors take away your homestead, but the IRS, and sometimes other government owned entities, can put a lien on it.

    The homeowners insurance company will not put a lien on the house, it will just be uninsured, and possibly subject to some additional penalties.

    If I were your friend, I would sell the house if she can. IF she inherited it, then she received a step-up in basis on the property. Thus, she wouldn't owe taxes on the original property value, but only potentially on any gain she had since it was passed to her.

    FL law may be different, FYI. If the others cannot comb through this one Pam, I will confirm with the focused estate planners at the office tomorrow.

    Scorpio and VenusGoddess may be very helpful here.

    Also, make sure she isn't being billed for anything on top of the basic P&I. She probably doesn't have the ability to self-escrow the property taxes since she is falling behind. That's ok, the IRS isn't a creditor you want to fuck with. And prop. taxes will be due in December or January, FYI.

    I am sorry, this doesn't sound too promising. Is there any chance of a re-fi? Anyone?

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  3. #3
    Pamela
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    Default Re: Probate?

    Ty Katrine, but her not owning it, she cant sell it. It's still in her dead mothers name. I noticed when looking online that the hospital is going to do something (perhaps court) because the mother has a stack of bills not paid, the father had some as well. Guess they can put a lien on the house.

    I told her cut your lose and move (the house is a dump) get a nice place. She said they will bury her there.

    But all these companies are allowing her to pay what she can, like Homeowners Ins. I don't know why they would....it's not legally her home.

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    Banned Melonie's Avatar
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    Default Re: Probate?

    But all these companies are allowing her to pay what she can, like Homeowners Ins. I don't know why they would....it's not legally her home.
    ^^^ because it's money in their pocket, and they really don't care what the source of the payment is ... plus these payments in no way diminish the rights of these creditors to file claims against the estate / liens against the property.


    I noticed when looking online that the hospital is going to do something (perhaps court) because the mother has a stack of bills not paid, the father had some as well. Guess they can put a lien on the house.
    Hoo Boy [email protected][email protected] So the scenario appears to be that this girl's parents are now both dead ... that there are unpaid debts incurred by the parents prior to their death(s) upon which creditors have legal standing to file liens / make claims against the estate. It would also appear that this particular house is about all that the estate actually consists of - otherwise other estate assets could / would have been used to make mortgage / utility / insurance payments during the probate process.

    I agree that the wisest move under these circumstances would probably be to simply cut losses, move elsewhere, walk away with her own credit still 'clean', and allow the creditors to fight over the house with the executrix of the will. If she does 'sign on' to inheritance of the house, she will also be signing on to all of the liens / claims made against the estate.

    Not only will going through probate re 'inheriting' this house this trash her credit by substituting her own name for her parent(s) names on all of these unpaid bills, but it may in fact make her liable for paying out more total money than she can recover via a 'distressed sale' of the house given the not so friendly real estate market in Florida. Also, with pre-existing and potential future liens against the title, an immediate 'distressed sale' might not be possible anyhow - and certainly not possible without your friend incurring huge additional legal costs.

    I agree with your advice that your friend should simply stop spending more good money after bad, and walk away 'clean' while she still can. Ultimately, going through probate runs a real risk that your friend will be forced into bankruptcy ... versus walking away now and leaving the parents' creditors attempting to get 'blood from a corpse' (literally).

    If your friend has her heart set on owning this particular house, she could probably pursue a deal with some local developer. She could stop making payments of all kinds, let the liens be attached to the house, let the house go into foreclosure and eventual sherriff's auction. At that point the liens are all forfeit, and the local developer can pick up the property at auction ... and with a 'clean' title ... for pennies on the dollar. Subsequently she could purchase the property back from the local developer ... with a 'clean' title ... as long as her credit is good enough to obtain mortgage financing. Under Florida law it may also be possible to bypass the developer (third party) and simply bid at the house auction herself. I have to believe that this would be far less expensive than going through probate, paying off all of the liens against the house, and paying all of the attorney's fees in order to eventually wind up with a 'clean' title.

    I actually did something similar in regard to 'buying back' my grandmother's house which I currently live in. Also ***wink wink*** repurchasing the house at auction via a mortgage de-facto consolidates all of the estate debt into a low interest rate single debt ! It also makes the interest tax deductible, and can be accomplished without having to spend one extra nickel on legal fees or late fees or penalties. Plus, given the usual timing of foreclosures and auctions, she can avoid having to pay a good measure of property taxes (which will also go up in smoke when the house is auctioned right along with the creditors' liens).

    The only risk factor with this little maneuver is that going to auction opens up a potential bidding war against some neighbor / developer who really wants the property. However, given your statement that the house is a dump, there's apparently not much risk of that.

    The other risk factor is that, as a 'new' owner, your friend will lose any 'grandfather' protection in terms of property tax rates / local building code compliance etc. If these are big issues, then your friend should re-evaluate what it will really cost her to try and keep / fix up this house versus how financially well prepared she is to pay for fixing up this house versus what the house will actually be worth afterwards. The days of easy mortgage credit are over !

    ~
    Last edited by Melonie; 11-03-2007 at 09:03 AM.

  5. #5
    Pamela
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    Default Re: Probate?

    Wow! I kept telling her to walk...she is stubborn.

    Probate is going to cost her $400 which she does not have anyway. But wont they (whoever they are) go into Foreclosure on the home soon enough? Can't they?

    And then she will be out anyway.

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    God/dess VenusGoddess's Avatar
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    Default Re: Probate?

    This is a tough scenario. I do not know the laws in the state of FL.

    However, I can tell you this. Your friend needs to find out the laws and regulations of having a lien on the home. Some places, if the home goes into foreclosure, the liens get wiped out and it's their tough luck. Others, the liens will have to be paid off by someone eventually.

    Depending on what the laws/rules are in your area, there are several things to consider. If the liens get wiped out at foreclosure, then she may want to let the home go into foreclosure and then buy it at auction (it's much easier than people think). However, she would have to come with her own money/financing. If she's got bad credit, she would not be able to buy the home on her own...which is why I'm thinking she wants to just have probate change the possessions into her name.

    However, if the liens are NOT dropped at foreclosure (or short sale) then she needs to find out how much all of the liens are total (taxes, mortgage, medical, utility, etc, etc, etc) and figure out how much the house is worth in its current condition. If the liens are totaling more than the house is worth, she's better off letting it go completely. I know it would be hard for her, but any other way and she'll ruin herself financially.

    She has a lot of research to do. She needs to research the laws in your state about liens and also find out the Fair Market Value of her house. Find out, exactly, how many liens are against the house and the full total of those liens.

    She also needs to figure out how much work needs to be done on the place. When there is an inspection done, a house needs to pass an "inhabitable domicile" test. Meaning, that everything is in working order for someone to live there. Everything needs to be up to code.

    If she cannot afford the payments of this house, as it is...then she may want to think about just letting it go completely. The house will not miraculously repair itself once she moves in...and I can almost guarantee you that depending on how ill-repaired this house is...it will hit a point where everything will go wrong at one time. And the things that will go wrong will cost a shit load of money to fix.

    Tell her to do her research. There are other ways for her to hold onto the memory of her parents without sending her credit to hell. Research, research, research, inquire...ask questions, etc. But, do NOT do anything to move the stuff into her own name and do NOT sign any "promise to pay" to any creditors of her parents!!

  7. #7
    Pamela
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    Default Re: Probate?

    Ahhh we had a fight on the phone this morning. She asks advice, i get some and she is not listening. She can't buy the house at auction. She just started working again, she makes no money to even keep thr water bill up, and the phone bill up, electric has been off for about 30 days now. Her plumbing is going, the pool has a tree that fell in it almost 4 yrs. ago due to the hurricanes.

    It's a mess, the garage....oh boy! Her carpet smells musty. The roof....

    I wish she would start saving, and walk away.

    I know they are going to take the home, but this is taking forever....Her mother was the last to die, and this has been over a year now!

    She is being ignorant to anything. I just wanted to help her, i don't know the answers, so i come here.

    She avoids, hopes problems go away. But they wont. It's not her home.

  8. #8
    Banned Melonie's Avatar
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    Default Re: Probate?

    She avoids, hopes problems go away. But they wont. It's not her home.
    ... and, unfortunately, it sounds like it will never BE her home. As Venus points out, even if she were to be given a clear title at probate ... which she WON'T unless she pays off all of the creditors and obviously can't afford to do unless she wins this week's lottery ... there's still the matter of not only keeping up with ongoing expenses like property taxes and insurance and utility bills. There's also an issue of tens of thousands of dollars worth of home repairs which need to be completed in short order before the house 'falls down'.

    At any rate, it looks like YOU can walk away from the situation and allow your friend to discover for herself exactly how things work when unpaid creditors are involved. Fortunately she can't come up with the $400 to complete the probate process, so by this fortunate accident her parent's financial problems won't add to her own financial problems.


    In regard to a forced foreclosure, this will probably remain stalled as long as your friend is stupid enough to keep sending in the occasional mortgage payment in her parents' name. As soon as the money stops flowing, the foreclosure paperwork will start flowing ! In the meantime, the lender probably isn't in any hurry to book yet another belly-up mortgage.

  9. #9
    Banned Katrine's Avatar
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    Default Re: Probate?

    Is she currently living in this house Pam?

    It sounds like a worse situation than I originally thought. If the place won't sell for much and she can't save $400, bless her soul, she would be wise to implement Melonie's or Venus's strategy.

    All I can say is I wish her the best of luck in resolving this very emotional dilemna.

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    Quote Originally Posted by Mia M
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  10. #10
    God/dess VenusGoddess's Avatar
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    Default Re: Probate?

    If the house is in that bad repair...it would be hard to get a new mortgage on it anyways. Mortgages require that the house be insured. In order to get a house insured, the house has to be in decent condition (meaning that the house is not going to fall with the next strong wind). The appraisal also has to list that the house is in average condition.

    Melonie, even if she's making the "occasional" mortgage payment, chances are that the foreclosure proceedings have already begun. Being that she is NOT the owner of this house...she has no case pending in probate...the mortgage company does not have to serve any of the inhabitants in the home before the begin foreclosure proceedings. This woman could wake up one day with the sheriff banging on the door and telling her the house has been sold at auction (whether to a developer or back to the bank). If she has a case in probate court, the mortgage company would need to serve the probate. However, being that this woman has no case pending...is not the owner of the estate (even though she may be the executor) and is making the occasional mortgage payment...chances are, the mortgage company has already moved forward in the foreclosure process and this woman is scrambling to make a payment here and there and she will get nothing out of it.

    Even IF she were to go to probate court...that does not mean that the mortgage company has to allow her to assume the mortgage. They may push to have the house mortgaged off to someone else. Since her credit is so bad, she probably won't get a mortgage...and even if she had good credit...the house is in such bad repair that she couldn't get a mortgage because 1) the appraisal would not be able to say that the house is in average condition (at least) and 2) she would be hard pressed to find an insurance company to insure the home that has a pre-existing mold problem, a fallen tree in the pool which was never taken care of, a roof that needs replacing, etc, etc, etc.

    I don't think she has a choice of whether or not to keep the house. The only choice she has is whether or not she's going to keep throwing money away trying to stay in it. But probably sooner than later, it's all going to get swept out from under her...and she's going to have LOST all of the money she put into it. She has NO way of getting any of the money back.

    She needs to just run, not walk, away from this house and her parents creditors.

    I hope everything works out well for this woman.

  11. #11
    Pamela
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    Default Re: Probate?

    Quote Originally Posted by Katrine View Post
    Is she currently living in this house Pam?

    It sounds like a worse situation than I originally thought. If the place won't sell for much and she can't save $400, bless her soul, she would be wise to implement Melonie's or Venus's strategy.

    All I can say is I wish her the best of luck in resolving this very emotional dilemna.
    Oh yea she is living there alone. She now works phone sex (ahhh gosh she needs training) as well to bring in more money. But it's at the point where if i mention the home now, she changes the subject. She thinks people are just going to let this go on..i doubt that.

    I feel for her. I can't help her. She's too far in debt.

  12. #12
    AudreyLeigh
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    Default Re: Probate?

    Sometimes its best to let people learn on their own.

    You got great info from Mel and Venus. You told your friend that information.

    Shes obviously emotionally attached to her childhood home (understandable) and wants help to save the house. She doesnt want to be told to just walk away. She wants help on saving the house (even if its NOT the best thing, and NOT going to happen) So YOURE being seen as the bad guy for not telling her what she wants to hear. Which explains the fight.

    At this point youve done what you can and Id just be there for her but let it run its course.

    Shell eventually lose the house - just be there when it happens without any "I told you so's"

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