With your situatuion, based upon the rift that exists between parties here, and the lack of knowledge of the process overall, this is why I don’t recommend you even try. If circumstances are what you say, you may not be able to buy this place for near FMV, let alone a huge discount, as you suggest. People are People, about everywhere… meaning human nature will keep this from unfolding the way that you want.
A perfect stranger, especially someone with the specific knowledge to negotiate a deal like this one, would have a far greater chance of making a little headway… just my intuition speaking here… Hire a professional, which if there is a chance of working out a deal here, this will put you far closer to it unfolding in your favor… Sorry I can’t honestly tell you what you want to hear in this case.
There is certainly another option: sell the loan to somebody else. This might be at some discount from the existing amount owed. But it would get your mother out of the situation.
You might want to try selling it to a bulldog of an attorney. Then let him go up agains Mr. Uncooperative.
Folks don’t just Deed over their house, with potential equity of 300K to 500K in it, to clear up a rather small 2nd mtg. You describe this as if it is a motorist on a busy highway, and someone behind them honks, so they pull over so you can pass them by… It just doesn’t work this way…
Your mother, through competent legal counsel, could foreclose on the Note and Mtg. This would be her right as a secured party holding such a security instrument that is in default. Yes, she may need to payoff the 1st mtg, or have the option to bring it current, depending upon the type of security instrument… either a Deed of Trust or Mortgage, and your states laws dealing with acceleration of obligations.
As to dealing with someone who you don’t get along with, a foreclosure and an attempt to accelerate a debt is not exactly going to heal any wounds here. You should have a professional… competent Atty handle this from A to Z… and stay out of any attempt to make collections. My crystal ball says this could run amuck on you rather quickly, with your limited knowledge of the situation.
I understand that this will not be that easy. I know it is a long, involved process. As far as healing wounds - I know foreclosing won’t help, but I’m not looking to make friends with the guy, I’m looking for a smart way to go about making this deal work. So, you would suggest I don’t try to get him to sign over the deed?
B.T.W - Thanks for you input.
I’m going to agree with JT here. THe guy most likely isn’t going to hand you $300-500k of equity just because you guys don’t get along. You have a very long foreclosure cycle in NY. When all is said and done, most likely you won’t end up with the property anyway. They will pay off your mom’s mortgage.
And if things start to go south, and he decides to play nasty with you. He could play the foreclosure cycle for a year, then play the BK game for a year or two. At which point, the first balloons out of control, and he wrecks the property. A $500k mortgage that goes through a foreclosure and bk for a few years, can get really ugly really quick. Then you’ll have to pay thousands of dollars to reinstate the first to actually save the property from the first foreclosing. Hmmmm… 2 years of non payments on a $500k mortgage with $4k payments, that’s a reinstatement of $96k plus attorneys fees, late fees, forced place insurance, property taxes, etc. Doesn’t sound like too much fun does it?
My course of action I would propose is get over your “hard” feelings and treat this transaction as business. If he doesn’t pay, take legal action, foreclose. But, if he pays then accept his money and hope for the best. You don’t have to like the guy or want to invite him over for Thanksgiving dinner, but don’t fight just for the sake of fighting.