Reply #58: 3 houses - "Moms", his 400k house, his 265k house. Sorry I

[kelly1mm]

was not more clear. By title he "owned" the 150k house that mom lived in, he was paying the mort. on his first house that had a mort of 400k but was worth 265k. He went out and purchased the third house (265k) and let his 400k house go into foreclosure. He made a "business decision" to stop making payments for the house he was underwater on. Good advice if you are judgment proof or live in CA where all purchase money 1st mortgages are non-recourse. He was not in CA so the bank did a records search and found "moms" house sitting there free and clear. They ended up with it in the end.

Sad story and one which I try to tell my clients about when they walk in and say they hear they can put their kids names on everything so it doesn't go to the government when they need nursing home care. (Not even going to start with my objections to that as a matter of public policy btw.) You would be amazed at what problems come up between seniors and their adult children. Lots of outright theft of funds and unintended consequences of "coffee shop estate planning".