Signing a note proforma, to perfect the lien only...

Not sure if this is the right forum or not; if not, please move it to the correct forum.

Anyway, my grandparents purchased a house for me in Fort Worth, TX. They live in TN. My grandpa signed the note and Deed of Trust, my grandma signed the note and Deed of Trust: signing Pro Forma to perfect the lien only.

The plan was for me to assume the loan after I had one year of work in the area to qualify for the loan (credit was fine, just no job when I moved). In the meantime, my grandpa passed away. We didn’t get the loan assumed and he never changed his Estate Papers to reflect the purchase of this house.

Now I am looking at moving and due to the area being zoned incorrectly, the city is looking at allowing low income houseing in the area so needless to say the area is not a “seller’s market”. If I leave while trying to sell the house and can’t make the note amount, can the mortgage company come back for payment on my grandma?

I hope this makes sense and thank you for any help anyone can give me.

Since they both signed the note the lein holder can "come back " on your grandma. Is there equity in the property. If the loan company had to foreclose would it sell for the loan balance at the steps. You could just let them foreclose if you grandma did not object to the bad credit rating against her. You could also deed the property to the bank in lue of foreclosure. This could help your grandma’s credit a little and would prevent the bank from “coming back against” your grandma. Banks however are not really coming back against people except to the extent of 1099 forms and possibly where your grandama could owe tax on any relief of debt of the property sold for less than the amount owed on the loan.

You could also find some one to buy the property subject to the loan with a few bucks down and rent it to sec 8 or just rent it out yourself. Hope my ideas and suggestions helped a little

Thank you,

Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737

512-301-9171 home
512-587-6177 mobile

I am located in the DFW area and might be able to help you with your house.
Email me back and we can at least discuss it.


Welcome to the board.

The short answer to your question is yes your grandmother could be held liable for the note if you walk away from the house. The bank could foreclose on her and sell the house at the courthouse. That would leave a very bad mark on her credit for the next 7 years.

Like Ted said, there are other options available to you rather than just walking away. Contact some local investors and see what solutions they may have for you.

Good Luck.

Thanks you for the information and advice. It is will be a big help in making some decisions. Thank you!