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Life estate and foreclosure

Discussion in 'Foreclosure, Repossession, Auctions, Short Sales' started by Taspiper, Feb 12, 2017.

  1. Taspiper

    Taspiper Law Topic Starter Guest

    Jurisdiction:
    Colorado
    Hello, this situation is complicated.
    Father creates life estate on his property giving it to son and wife. Wife takes out a mortgage alone. Son signs deed of trust but nothing on mortgage. Father signs nothing.
    A year or so later wife leaves, stops paying mortgage and it goes into foreclosure.
    A rule 120 hearing is set and then dropped. A year or so later another hearing is set and then dropped. Now 2 more years later another hearing is now set.
    Question is... is there a statute of limitations on this? The mortgage was called due in early 2011.
    Also is the mortgage even valid without the life estate owner a party to it? The lender has acknowledged they tried to file a claim against title company but they state it was denied.
    The wife filed a quit claim deed about 2 years as part of divorce.
     
  2. army judge

    army judge Super Moderator

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    First of all, a life estate is measured by the life of one person at a time.

    Legally the mother or son can hold a life estate successively, but only one can hold the title to the property in his or her name, with the other being the successor life estate holder, assuming he/she outlives the first holder, that's a contingent life estate.

    Someone must pay the mortgage, or the the life estate fails.
    I don't know the value of transferring property to someone calling it a life estate, if that someone has to pay the note.
    I don't think mom ever had a life estate, she simply inherited property encumbered with a note and lien to a lender.
    A life estate holder can't encumber the property with a mortgage, or sell the property.
    A life estate only gets to use, but never own the property for the duration of her/his life.

    Usually the life estate holder is expected to pay taxes and upkeep, unless the benefactor provided for same.
    The lien holder has rights superior to the life estate holder who can only occupy the property, but is inhibited from selling it.

    I don't know what type of mess someone created.
    If you want to unravel the mess, hire yourself a good real property lawyer.

    If you're not the lienholder, don't get involved.
    The life estate was probably doomed from its inception if no one paid on the note.
     

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