Legal Question in Real Estate Law in New Jersey
Life Estate Questions......
When my Mother-in-law died, she left the house to my husband. While the will was in probate, the attorney sent a letter to the bank stating that the title would be in my husband's name and asked to allow him to take a mortgage out which he did. In the time since, we applied for a 2nd mortgage and were approved. When we tired to refinance our 1st and 2nd mortgages together for a lower rate (going through the same bank who currently hold both), they told us we could not refinance since the title is a life estate! We were not aware of this until they told us, we would never have taken the 1st mortgage, never mind the 2nd if we knew. Needless to say, our property taxes have doubled and we are struggling to pay both mortgages and now double taxes. The remaindermen that were put on the deed are my husbands siblings, one of which will not sign off. Is there anything we can do? Can the bank foreclose if we fall behind on our mortgages? We are at a loss. The lawyer who originally drew up the deed stated it was an ''accident'' but it is too late to ''fix'' and the remaindermen will have to sign off. Also, my husband is not a remainderman, so we stand to lose all we have put into this house if we try to sell.
2 Answers from Attorneys
Re: Life Estate Questions......
You should bring the deed and the will to an attorney to look at. You may have a malpractice case against the lawyer. As to the bank, if they are not paid they will foreclose. However, if the life estate existed when you got the first mortgage it may raise other title problems. Was there any title insurance? I have extensive real estate and probate experienc and would be able to help you.
Re: Life Estate Questions......
These are difficult questions to answer without seeing the Will and the Deed. However, if you fail to pay the mortgage, the lender can foreclose, but only against whatever interest you hold, so they may be stuck as well, unless there was a title insurance policy issued. Perhaps once they realize this they may agree to a loan modification instead of a refinance.
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