Q: I was searching the Internet and came across and article you wrote a couple of years ago. That posting is very similar to my current situation. My mother passed in September 2009, she had a will leaving the family home, transferred to me upon her death. She also had a home equity line of credit with a local bank, where the payments were automatically deducted from her checking account. I visited the bank and notified them of her death, providing a certified copy of her death certificate and spoke with the loan officer. The loan officer advised me to leave her checking account open and to continue depositing money to cover the monthly payment, which I have been doing since September 2009 to current. During this time period I did lose my job in April 2010 until December 2010 when I found part-time employment. Making payments were difficult, resulting in getting a little behind. Some month partial payments were made, other months full payments were made. Because my name is not on the loan, the bank would not discuss any details of the loan with me.
Most recently, the bank returned the June 2015 payment and still will not discuss any information with me without executor documents even though I have explained numerous times to them there was no estate. I am not able to get financing and I do not want to lose my home.
Any idea what I can do and why can’t the bank just take whatever they feel is owed at the end of the loan? I’ve been told by the bank I will have to open an estate and get executor documents to deal with them. This process will require an attorney which I cannot afford. Tee.
A: Dear Tee. Although I do not know what State you live in, I suspect the laws of your State are similar to the laws throughout the country. The bank is correct. When your mother died, some form of probate would be required. Many states have procedures for small estates. For example, in some states if the property is worth less than $100,000, you don’t need to probate but need to file an affidavit of inheritance.
Until you resolve this, strange as it may seem, the bank cannot discuss the loan situation with you. Technically, you have no “standing” even though you are the daughter. The privacy laws restrict banks from discussing situations with anyone other than the original borrower – unless you file for probate or comply with your state’s small estate probate.
Suggestion: if you cannot afford an attorney, there may be pro-bono legal assistance programs from the local bar association in your area. Also, you can talk with the probate clerk in your local court and he/she should be able to at least point you in the right direction.
Q: My wife and I purchased our home in 1971 for $ 44,000. Thirty years later, we transferred it to our Living Trust where we were both Granters and Trustees. The value at that time was $ 300,000. My wife died one year ago when the appraised value of the home was $ 600,000. At that time, my daughter was added as a Trustee. Did any of that change the basis of the house for tax purposes if it is now sold by the trust? Richard.
A: Richard. No. Your basis is still the original purchase price, plus any major improvements you made over the years. But please don’t rely just on my response, since it is general in nature. Please consult a tax attorney or a local Certified Public Accountant (CPA). In fact, you should talk with a CPA and have her make an analysis of what your tax basis is. That information will be of assistance to you if and when you decide to sell.
Q: What is the reason the amount of one’s mortgage is public record? Our local newspaper lists mortgage amounts with the name of the lending institution as well as the names of the borrowers. I can fully understand why property ownership, changes in ownership, and lienholders should be recorded for tax purposes. What I don’t understand is why the amount of the mortgage is anyone’s business other than the loaner and the loanee. Eric.
A: Eric, that’s an excellent and important question. In fact, other readers have asked a broader question: why should the fact that I just bought a house be listed in the newspaper at all?
The simple answer is that we all are curious about our neighbors, and since the information is public, the press will carry it. It’s analogous to when someone holds an open house for sale. Three kinds of people will walk in and look around: buyers, brokers and lookers.
The information about your home purchase and the terms and conditions of your mortgage loan are recorded among the land records in the jurisdiction where the property is located. These documents are public; in most states, you do not even have to go down to the local Recorder of Deeds office; you can search on-line from your living room and get all of the information that is published in your newspaper.
So since the information is already public, why shouldn’t your local newspaper publish it?
For many years, social security numbers were also listed on the land records. Obviously, this creates major problems when that number is sold and used by scam artists. Nowadays, it is my understanding that the social security number is not made public; but you may want to research your own documents to confirm.
Q: I live in a 12 unit condominium. A few years ago, my downstairs neighbor rented out his unit to new tenants, who have been an absolute nightmare. They are constantly fighting, loudly and late at night. Their teenage child has destroyed neighbors’ property and vandalized common property. I have called 911 on them several times for violent fighting and noise complaints. Their landlord ignores me when I try to contact him. The police say they can’t do anything because by the time they show up there is nothing to see, the alderman won’t do anything because the police haven’t done anything, and the board has only doled out a few modest fines. Is there any other action that can be taken against the tenants or their landlord? Dave.
A: Dave. Community living is democracy at its best and at its worst. I know it won’t be a consolation to you, but you are not alone. I get many similar email concerns from readers all over this country.
There are three things you can do, and do them all at once. Hire an attorney and have her file a lawsuit against: (1) the Board for failure to deal with this problem, especially if the teen-ager is destroying common property; (2) the landlord for allowing a nuisance, and (3) the tenants for creating a nuisance.
You should have proof. Get neighbors to listen to the commotion; if you can tape or video the nuisance, that would be helpful. And keep records of all of the unanswered complaints you have made against all three defendants.
Yes, litigation can be expensive. But your condo is most likely your largest investment, so you only have three options: (1) file suit, (2) accept the noise and live with it or (3) sell and move out. However, you may have to disclose the noise and the nuisance to potential buyers, so that may not be a viable option.
Not really but the 9th Circuit Court of Appeals, on August 7, 2015, issued a very significant ruling relating to unmarried taxpayers. Bruce Voss and his partner Charles Sophy borrowed $2 million to buy a home. They were both jointly and severally obligated to repay the loan. When it came time to file their tax returns, they filed separate returns, and each claimed a home mortgage deduction based on the amount of interest up to $1 million dollars of the debt. According to the IRS , taxpayers can deduct the mortgage interest they pay up to $1 million of the debt. Let’s clarify. This does not mean you can deduct up to $1 million in interest; it means the interest that you pay up to that amount can be deducted. It should also be noted that if married couples file separate tax returns, their individual cap is $500,000.
The IRS challenged these large deductions and the Tax Court supported the IRS. However, on appeal, the 9th Circuit Court reversed, holding that the $1 million loan cap on mortgages is to be applied on a per-taxpayer basis, and not on a per-residence basis.
Accordingly, unmarried owners of their principal residence can now – at least in those states covered by that court (such as Alaska, California, and other western states)– can take a considerable larger deduction. In the Voss case, each owner would be able to deduct up to approximately $55,000 per year. (Voss v Commissioner Internal Revenue).