House Calls by Edith Lank

Dear Mrs. Lank: Back in 2007 I was offered a great deal, to purchase a $1,500,000 house with only $10,000 down. One month after the buyer's agreement, and sending all my information (social security number, driver's license etc.) I got a call from the person who was helping me, informing me that the deal did not go through, and my deposit was returned. So far so good.

Then, last month I received an e-mail from that company stating that they will be mailing me a deed to transfer back the property that I own, and for me to sign, notarize it and send it back to them. I called them and complained that there should not be any property under my name because the sale did not go through. They said the owner of the property gave me the house as a gift! I was shocked, I thought it was some kind of philanthropic move. Then after doing some research, I found the house actually has three outstanding loans to the amount of $1,150,000 but I think the mortgage is being paid.

In the meantime, this real estate company keeps harassing me to sign the deed and return it so they could remove the house from my name. It looks like they miscalculated something, the value of the house is suddenly going up again, so now they want the deed back. But I'm not going to give it to them.

Anyway, my question is: There is someone living in this house. Can I evict this person by law and sell the house? — S., Rochester

Answer: Good grief, man! Are you still trying to get something for nothing? You don't seem to understand that you're in hot water. And anyhow, do you really believe that house could sell for enough to pay off more than a million dollars' worth of loans? Do you really believe there's any place in this country where values are suddenly going up right now?

Surely you know that if it seems too good to be true, it is. You did get something for nothing all right, but what you got was trouble — much more than you seem to realize.

Here's a possible scenario: The original owner, who probably had financial problems, signed over the house to "rescuers." Perhaps he even paid something for the promise that they'd take care of everything.

Then he was allowed to stay on as a rent-paying tenant.

Meanwhile, someone stole your identity and forged your name on those inflated loans. Then they made a few mortgage payments while preparing to run off to Brazil with all that mortgage money. Well, not all of it. Some was probably shared with an obliging appraiser and a crooked loan officer.

Whatever is going on, you'd be asking for more trouble if you tried profiting from this fraud. Talk to a lawyer right away. At the very least, your credit rating and all your assets are already at risk.

The whole business must be reported immediately to the attorney general's office, and if the house is located in another state, there also. Your attorney will know who else should be involved.

You're going to have quite a time before this mess is cleared up.

One On The Mortgage

Dear Edith: Do my wife and I both have to be on the loan together or can the loan just be in my name? Her credit is a lot worse than mine and I am the only source of income. — D.

Answer: You can place a mortgage on your own even if your wife is a co-owner. That's true with most mortgages, but there is one exception — if you're looking for an FHA mortgage. For that one, all owners must sign for the loan. You're right in thinking that your wife's credit rating might make it difficult to qualify. If you did want to place an FHA loan, you could simply buy the house in just your own name, with no problem in qualifying for a mortgage.

Buying Directly

Ms. Lank: How do I buy a house with cash without an agent? The current owner has about $10,000 left on his mortgage. — Via e-mail

Answer: If you and the seller are already in agreement, you don't need really an agent, but you might hire one — perhaps by the hour — to help you negotiate a written purchase contract.

Closing customs vary in different areas, but your best bet in this situation might be to have a lawyer handle the settlement. Your attorney will investigate to make sure you're not buying any other financial or legal complications along with the property. The mortgage will be paid off at the time of closing from the cash you put up.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

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