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unitedangels · Jan 16, 2009, 09:20 PM

Hello, I need to know how binding is a verbal agreement in court? A friend of mine acquired a home equity loan on his principal residence to assist me in the purchase of my new home by getting a mortgage for the balance and paying for all costs and fees from the equity loan, which was a line of credit. I was unable to do this right away because of credit issues, so he offered to pay for everything that was needed for the purchase. Our agreement was for me to pay back the monthly payment of the line of credit and to assume his mortgage on the house or to get a new loan for the balance of the mortgage within a couple of months-when my credit improves. Now that I have moved in, there has been an issue with him wanting to sign our verbal agreement. There are several people that knows him and can attest to the fact that he was buying the house solely to help me and for me. People such as my real estate agent, my loan officer(who prepared the loan), and family and friends. I need to know what type of action do I take asap??

George_1950 · Jan 16, 2009, 10:24 PM

Welcome to AMHD. You need a good contract attorney. The issue you face is called the statute of frauds:
"The statute of frauds refers to the requirement that certain kinds of contracts be made in writing and signed.

Traditionally, the statute of frauds requires a writing signed by the defendant in the following circumstances:
...
Contracts for the transfer of an interest in land...." http://en.wikipedia.org/wiki/Statute_of_frauds
The fact that you are in the house may remove this case from the requirement that you have a written contract. Good luck!

Fr_Chuck · Jan 16, 2009, 10:37 PM

Well it appears that he did not sell you a house, you bought it from someone else.

What you did from him was make a personal loan to use the money to pay a down payment.

So he was not involved ( If I understand it correctly) in the actual purchase of the real estate except to loan you money.

So for a loan, a verbal agreement is binding but the terms harder to prove.

So why would you not want to sign a written agreement to what you and he agreed to. Are you planning on lying and not paying him? If you plan on paying, then you should have no reason not to sign a written agreement