Legal Question in Banking Law in Pennsylvania

I am sorry to hear what your brother tried to do. A person cannot "verbally" agree to use their house as collateral for a loan. The owner of the house (your father) would have to sign the Note and the Mortgage in order for their house to be collateral for a loan. So, without speaking to the people at the bank, I would have no way of knowing what they meant when they told you, "... its legal your father said it was ok."

If your brother took out a line of credit using the equity of your late father's house, then your late father's signature would absolutely be necessary on the loan documents, i.e., on the Note and on the Mortgage. If your late father did not sign the loan documents, the bank's only recourse should be to sue your brother for repayment.

However, if your brother forged your late father's signature on the loan documents, the bank will still try to take your late father's house. If the bank claims that your late father signed any of the loan documents and files foreclosure proceedings, but nobody contests the signature as a forgery, the bank will win and will take the house.

I understand that you may have limited funds, but in this situation, you stand to lose a lot without an Attorney and will lose your late father's house. So, the couple of hundred dollars you pay to an Attorney now is a lot less than a few thousand dollars you will have to pay later in order to resolve a much bigger problem and the loss of your late father's house all together.

I realize that this might not be exactly what you wanted to hear, but there are so many pitfalls that it would not be wise to handle this matter without an Attorney. You may also have a very limited time within which to act, so the sooner you retain the services of an attorney, the quicker this problem can be resolved. If you wait any longer, the "water will get muddier" and it becomes even harder to straighten out this problem your brother created. As you already saw, the bank was not willing to even talk to you because they do not want to risk losing the collateral they think they have. And, when they did talk to you, they lied by telling you everything was "Okay". Let me know if I can be of further assistance. You can reach me at 610-259-2724.

Kindest regards,

ANDREA G. TILLIS