what legal documents do you need to take over monthly payments on a relatives house?

Asked by Tiffany, Boring, OR Sun Jun 14, 2009

My father is asking me to take over his monthly payments, after a couple of years refinance the home when the market is better. What documents do I need just in case after the market is better that he cannot claim the house and I lose out on the money I've put into it.

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Liz Warren, Agent, Welches, OR
Thu Jun 18, 2009
Tiffany:

I recommend you contact an attorney. An attorney can advise you how to protect your legal rights and your investment to help your father at this time.
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Craig Loughr…, , Oregon
Sun Jun 14, 2009
Hi Tiffany,

How did your father purchase the property? What type of document did he use when he purchased it? How long ago did he take out his loan? What type of loan is it? All these factors can affect your ability to do what you want.

If your father has a typical mortgage on his property, then he has a signed an agreement with his lender saying that his loan cannot be assumed (payments taken over), or that it cannot be assumed without the approval of the lender. Depending on your situation, and your father's, you will likely have to take out a new loan yourself, or get approval in writing from his lender to assume payments. Even if his lender allowed you to assume the payments, the lender almost certainly would require you to go through a complete credit qualification process.

Assuming that you took over payments, whether in violation of the your father's loan agreement or not, you do need some kind of document to protect your interest, and that document needs to be filed with the county recorder's office in the county where the property is. If you take over payments without lender approval, however, filing your "document" with the county recorder potentially puts your dad's lender on notice that he is in "default" on his loan, which could allow the lender to order that the property be foreclosed. That would mean that both you and he would lose the property. If you don't file with the county recorder, then you have nothing to prove that your "document" exists, or when the "document" was executed. There are another whole host of problems that can result by not filing your "document" with the county recorder.

As for the type of document to use to prove your interest in the property, most real estate transactions in Oregon involve either some type of "deed" or a "land sale contract." There are several kinds of deeds to consider, and a "land sale contract" can be drafted with any provision you want (as long as the provision doesn't violate a law). But whatever document you use is best worked out by talking to a real estate attorney. If you need a referral, I can provide you (off-line) the names of several real estate attorneys. Or you can use the Oregon State Bar's Lawyer Referral Service. Attorneys on the Lawyer Referral Service charge $35 for an initial consultation: http://www.osbar.org/public/ris/lrsform.html

If you have any other questions, feel free to e-mail or call me. I will be glad to help to the extent that I am able.

Best of Luck,

Craig Loughridge
Web Reference:  http://www.bybryson.com
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