Posted by JohnBoy on April 26, 1999 at 09:26:15:
If the son-in-law quit claimed the property over to the x father-in-law then you will have to deal with him on buying the property. At this point the son-in-law has nothing to sell. He’s still on the mortgage, but he has no ownership in the property any more since he signed his interests over to the father-in-law.
You can tell the father-in-law you may be interested in buying the property but you need to know what the pay off on his second is. Once you get the exact pay off on the second then you ask for a discount to pay him off in full. Or you can see if he would be willing to let you assume the second and make payments on it. Or you can see if he would substitute the second for collateral in another property you own.
You need to contact the lender on the first and find out how much it is to bring the first current. If the first is in default then you can offer to buy the first at a nice discount from the lender. If your able to buy the first then you can foreclose on the property as the first lien holder. Now the father-in-law will have to either bring the first current with you to protect his interests or make a deal with you to get whatever he can out of the second. If you foreclosed on the first his second would be wiped out at the sheriffs sale unless he shows up to buy the property at the minimum bid which would be the face value of the first plus all your legal and court costs, plus interest and penalties owed for the back payments owed on the first.
Contact the first lien holder first to see where you stand with that. Then contact the father-in-law to see if there’s something you can work out with him on the second. You will also need the father-in-law to deed the house over to you since he’s the seller now. The son-in-law basically has nothing but the liability on the loan at this point.
I guess a lot is going to depend on how the x father-in-law gets along with his x son-in-law. The father-in-law is going to want to make sure his daughter get’s her fair share out this deal I’m assuming. In the end the son-in-law could end up with nothing since he has nothing to sell or bargain with. You could find yourself in the middle of a family feud on this one, so contact the first lien holder and see about buying the first from them if the loan is in default. That will give you control of the property by either foreclosing or getting the father-in-law to agree to some kind of favorable terms with you on the second to protect any interests he may have in it.