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    sipn's Avatar
    sipn Posts: 3, Reputation: 1
    New Member

    May 27, 2008, 06:36 PM
    Can my property be seized if I default on bank loan?
    I'll try to make this as short as possible. My husband and I are both now disabled, but about 8.5 years ago we co-signed with our daughter to buy a used (1 year old at the time) mobile home. She is now divorced and the mobile home is parked on land next door to her ex-MIL, who owns the land.

    We have tried to sell the mobile home, and even came down on the price to several thousand dollars less than the payoff. No takers, none at all. We are in the process of trying to "pretty it up" in hopes of making it more attractive to buyers, but our income is very limited.

    Our daughter is paying the payments, but a week ago her ex-husband was arrested on 4 felony counts so she is no longer getting child support. She is already working two jobs, but we know she can't continue to pay the MH payments as well as her living expenses.

    If we absolutely cannot sell the MH and have to let it go back, can the bank seize the real estate my husband and I own, or will they just be able to get a lien against it? We own our home (small mortgage) as well as my mom's house (a small mortgage as well, plus she has a life estate). My daughter has no assets.

    My husband and I are both on Social Security Disabiity and have a few thousand in savings. Should we withdraw our savings?

    Edited to add: We live in Alabama and the home is financed in Alabama, but it is parked on land in Florida.

    Thanks for any advice.
    Loan_Guy's Avatar
    Loan_Guy Posts: 83, Reputation: 6
    Junior Member

    May 29, 2008, 08:30 PM
    Since no one has answered so far, I'll take a shot at it.

    To answer your question: it depends!

    If you used the MH as collateral on the loan, then they can foreclose, if it is financed with a mortgage. If it was financed like a trailer, then they can repossess it. Any way you look at it, it will damage the credit of whoever is on the loan and cause a lot of grief for the lender. Then there is the fact it is sitting on ex-MIL's property.

    As far as placing a lien on your existing properties, you should speak with an attorney (which you should do anyway!).

    I know that you are referring to a possible future event. If this were to happen, you may want to see if it is possible to negotiate a short sale (if it is mortgaged) with the lender. Given the cost of a foreclosure, they may be willing to work something out. In reality, the cost to foreclose could be more that the value of the trailer.

    Just food for thought.


    PS. This is complicated. Speak to that attorney!
    sipn's Avatar
    sipn Posts: 3, Reputation: 1
    New Member

    May 30, 2008, 10:52 AM
    Thanks for your help. It is not mortgaged, but financed like a mobile home.

    We will not go the repossession route unless we simply have no other choice. If we find ourselves in that position, we will see a lawyer. Thanks again.
    sipn's Avatar
    sipn Posts: 3, Reputation: 1
    New Member

    Jun 12, 2008, 03:12 PM
    Just a follow-up for anyone else who may find themselves in our position. We spoke to an attorney, and this is what he told us: in Alabama (as well as in many other states), your home or any other property can be seized and sold to satisfy your debt. So, of course, we find ourselves in the position where we cannot allow the mobile home to be repossessed. We will have to keep up payments, insurance, etc. until we can sell the mobile home... probably at a considerable loss.

    I hope the info we gathered can be of benefit to someone else.
    progunr's Avatar
    progunr Posts: 1,971, Reputation: 288
    Ultra Member

    Jun 12, 2008, 03:35 PM
    Just to clarify what that attorney told you.

    The property can only be seized, if you own it free and clear.

    If there is a loan on the property, then they must place a lien against it, which would have to be paid, before the property can be sold or transferred.

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