Taking over payments on my brothers-in-law house. Help me make it legal!

The house is in NC which is a warranty deed state. It’s current (?) but has arrears… There currently is no insurance on the property.

I asked him to get an insurance quote which he did. The house is currently vacant and I would take immediate possession.

Bal ~ $53k
Arrears ~ $2600 to be paid within the year
Payment ~ $530
Insurance ~ $60/mo

Zillow gives it a value of approx $75k

I don’t know why insurance was never added to mortgage or how long it’s been without.

My plan is to reside there for 6 months (+/-) at which time I’ll flip somehow.

I just want to make this legal so that he can’t come back and take the house. I’ll be making house and insurance payments directly…


You’re going to inflame all the red flags currently waving on this property with your approach.

The loan is at least five months behind. The bank isn’t going to accept anything less than the full over-due payments, plus fees and penalties, before they will accept normal monthly payments. The bank will have put a ‘forced insurance policy’ on the house and added that to the arrears.

Bring the loan current, transfer title into the name of a trust with you as the beneficiary/trustee. Make sure the bank cancels the ‘forced’ high-risk policy. A warranty may not fly in your case unless the title is marketable, apart from the defaulted loan.

Why move into it? Fix it and seller finance it. If this house is worth $75k in its present condition, sell it for $80k with $8000 down at 7% fixed interest on the balance, or equivalent to a $200/mo spread on payments, whichever is greater. Then pray the buyer doesn’t perform and rinse, repeat and collect another $8000 down and another $200/mo in payment spread (if possible).


Thanks Javipa, and Happy New Year!

I was able to speak to the mortgage company (Wells Fargo) using my brothers in law info (so I played my brother in law while speaking to them)…

Here’s the skinny… the arrears are part of a loan modification… he has till the balance of the loan to repay the arrears. The catch is he can never be late again… (so, kinda technically, the loan is current)

There is no forced insurance from the mortgage company. The lapse is recent and he has the opportunity to get another policy… we will do that today/tomorrow…

My plans were to do as suggested with the seller financing… A family situation has arose and I must take the kids until they finish school… hence the 6 months… During which time, I’ll do any necessary repairs and be ready to RTO around June…

So now, can we talk about the deed; you mentioned warranty… marketable title… Can you explain? Are we at this point ready to transfer title to a trust? Where does warranty and marketable title fall into play here? What’s the title/trust process?

Thanks a bunch

If the loan is modified and all the terms of the modification are maintained, then you can go forward with the transfer of title. You of course will have to abide by the terms offered/negotiated with the lender and your brother.

You said you were in a Warranty Deed state. That’s fine. My question was regarding your brother actually being able to warrant the deed against any defects since the property was in default, probably had a NOD filed against it, and whatever else might be involved with a defaulted loan.

I pm’d you with some additional details about control of the property and the trust agreement.

Hope this helps.

Thanks Again Javipa. I did receive your message. I’ll run with this and msg you if I have any other questions.



Excellent posts Javi!