If there are 4 people with 1/4 interest each in a property. The mortgage note was signed by one of them, prior to the others being added via quit claim deed and paid nothing for their acquired interest (part of estate planning by deceased original co-borrower/title owner) When the property is sold how is the mortgage paid and how is distribution made to the owners of record? Does the payment of the mortgage get deducted from all of the sales price first? Or does the mortgage amount get deducted from the share of the only one of the four who signed the mortgage?

Thanks in advance for your info

Assuming that all 4 have an equal interest, an expenses attributable to the sale are deducted from the sale price. The Net amount is then divided equally among the owners.

However, if they haven't been contributing to the payment of the mortgage, then it might be necessary reimbursement the one who was paying from the net amounts given to the other three.

Scott Gem, I don't understand your second Paragraph. More info. The person on title and the only one on mortgage has been solely paying the mortgage. One of the added title holders wants the mortgage balance deducted from his share of the sale. In other words they want their 25% from the sales price not from the equity after the mortgage paid from sale. Their reasoning is that they never signed the mortgage and should not be responsible to have their $ pay the balance on the mortgage.

Who originally acquired the property? Under what conditions were the other three added.

I can see if one of them obtained a mortgage AFTER the fact. In that case, then the balance should come out of their share. But if the mortgage was obtained to purchase the property and the other three were added afterwards, then their interest in the property should include its debt.

The house was owned by our mother, she had a mortgage with balloon payment. It needed to be refinanced, brother volunteered to help get mortgage because her SSA $ not sufficient to qualify. Then they were only two on mortgage and deed.

Subsequently one of the "sister" had mother sign a quit claim deed adding the sister to the deed along with a will which left all mother's property to the sister alone. The recorded deed came to house. Mother contacted name of attorney on recorded deed and asked for copies of all papers he had her sign. Included in them was the will, Mother contacted another attorney and rewrote her will with her own wishes not those of the "sister". However the sister refused to sign off the deeds. Mother had hired an attorney to try to arrange this but sister refused. Mother subsequently deed her remaining interest to her other children. Now total of 4 on deed but three acquired title after mortgage and paid nothing for their interest.

You really need a real estate attorney to unravel this mess. But my take on it is that when mom deeded the property to the other children, they acquired an interest in the property ALONG with its debts, especially since the debt was secured by the property. Therefore, any proceeds of the sale of the property are NET of the debt. So the debt is taken off the top and the balance distributed equally among the owners.