I'm dealing with a situation where a friend is being forced to repay a "gift" that was used as the downpayment on a condo purchase and would appreciate any advice.
She was pressured into purchasing a condo for about $40K above market value. The seller of the condo was her boyfriend at the time, who had been trying to unload the condo on the market without luck for about a year. She didn't have money for a downpayment, so he "gifted" her $48K for the 20% down. There was a gift letter signed.
Immediately following the closing, he had his attorney draw up a promissory note for a $48K loan. It contains language stating that it supersedes the gift letter. It also states that if he has to sue her or use collection agencies, etc, she would be responsible for the legal costs. It states that she would give him the proceeds from the $8K first time homeowners tax credit (which she did), and she's been paying off the $40K balance at $750 per month over 5 years at 5%. The current balance on the loan to him is $33K.
About 30 days after closing, he broke off their relationship. She's continued to pay him for 13 months, but is now close to defaulting on all of her debt due to loss of income. The question is this: If she simply stops paying him, is there a chance he could win a judgement that forced her to repay him? My initial thought is that the judge would see very clearly that they both knowingly signed the gift letter, thus defrauding the bank. (I believe she was naive to this point at the time of the transaction, as she did not have her own attorney or a real estate agent representing her interests at any point, but I think that's outside of the scope here).
Do you think he would have any legal means to collect the remaining $33K?
Thanks. I really appreciate your comments and feedback!
She was pressured into purchasing a condo for about $40K above market value. The seller of the condo was her boyfriend at the time, who had been trying to unload the condo on the market without luck for about a year. She didn't have money for a downpayment, so he "gifted" her $48K for the 20% down. There was a gift letter signed.
Immediately following the closing, he had his attorney draw up a promissory note for a $48K loan. It contains language stating that it supersedes the gift letter. It also states that if he has to sue her or use collection agencies, etc, she would be responsible for the legal costs. It states that she would give him the proceeds from the $8K first time homeowners tax credit (which she did), and she's been paying off the $40K balance at $750 per month over 5 years at 5%. The current balance on the loan to him is $33K.
About 30 days after closing, he broke off their relationship. She's continued to pay him for 13 months, but is now close to defaulting on all of her debt due to loss of income. The question is this: If she simply stops paying him, is there a chance he could win a judgement that forced her to repay him? My initial thought is that the judge would see very clearly that they both knowingly signed the gift letter, thus defrauding the bank. (I believe she was naive to this point at the time of the transaction, as she did not have her own attorney or a real estate agent representing her interests at any point, but I think that's outside of the scope here).
Do you think he would have any legal means to collect the remaining $33K?
Thanks. I really appreciate your comments and feedback!
