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When I was 17 a family friend (real estate broker) gave money to purchase a a small home. The next year she advised me to give my mother a Life Estate and to sign a "pretend" note and mortgage payable to her to protect the property from any law suits that may arise. I gave the Life Estate to my mother. The mortgage was written for 3 x more then the money given and no other money was given then or at any other time. My mother also singed the mortgage.Full payment was to become due in 2018 according to the mortgage.

There is no mention in the mortgage of the money given to me as a minor

I did not have insurance on the property and also had not paid the taxes one year as required in the mortgage. She paid the taxes that year.

She is foreclosing on the Full amount of the mortgage for this reason.

I filed an answer and counter complaints.

In her interrogatories she lists the money given to me also different checks she claims was money she loaned my mother before the mortgage was created. I assume she is saying we had a oral contract when I was a minor and the money was given for the purchase of the home.

My question is by signing the "pretend" mortgage does she have a right to these claims?

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Oral contract with a minor
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Can you clarify your post? The details make a big difference. What year did this event occur?

Do you mean that the real estate broker provided the money for you to buy a home? Then the broker instructed you (a minor at the time of purchase) to put the home into whose name?

Was the deed in your name and then you gave a life estate to your mother?

Lastly, it looks like the broker held a private mortgage in exchange for the money provided to you to purchase the home. Was it a recorded mortgage at the time of the purchase or at a later date? Were there payments made on the mortgage to the lien holder (broker)?

The answer to these questions will help. A minor can not enter into a contract. Were there other parties (your Mother) on the contract?

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Yes thanks!

Can you clarify your post? The details make a big difference. What year did this event occur?

2002 is when money was given and property bought.......2003 is when mortgage was signed

Do you mean that the real estate broker provided the money for you to buy a home?

Yes she provided part of the money

Then the broker instructed you (a minor at the time of purchase) to put the home into whose name?

No she did not instruct me to put into anyones elses name at the time of purchase.

When I was 18 (a year and a half later) she instructed me to give my mom a Life Estate and for my mom and I to sign the "pretend" mortgage.

Was the deed in your name and then you gave a life estate to your mother?

Yes

Lastly, it looks like the broker held a private mortgage in exchange for the money provided to you to purchase the home. Was it a recorded mortgage at the time of the purchase

No mortgage was signed or recorded untill I was 18

or at a later date?

yes......but the mortgage was for 3 x more money then she gave....I was told by her it was just to protect the property.....no other consideration was given on her part. No mention in the mortgage of the original amout given.

Were there payments made on the mortgage to the lien holder (broker)

No... the mortgage stated that full amount would be due in 2018. It also says that insurance had to be on the property and taxes had to be paid. I had no insurance and she paid the taxes one year.No contract was signed at the time of the purchase (when money was given) of the property. The money was given and property was bought when I was a minor.

The "pretend" mortgage was signed after I reached 18

The answer to these questions will help. A minor can not enter into a contract. Were there other parties (your Mother) on the contract?

There was no contract untill the following year after I turned 18 and my mother and I signed the mortgage.

I assume she is saying I made an oral contract when I was still a minor.

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Minors can not enter into a contract, oral or written

Ok great!.....but would the 'pretend" mortgage be legal since I was an adult? Even through no consideration on her part was given.

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I would say the broker scammed you. File a motion with the court to include the broker in the suit and have her explain this "pretend" mortgage. In a court of law there is no such thing as pretend anything.

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I would say the broker scammed you. File a motion with the court to include the broker in the suit and have her explain this "pretend" mortgage. In a court of law there is no such thing as pretend anything.

Well she is not saying it was "pretend" now. She is foreclosig on the full amount of the mortgage. (3x more then the money given)

I did answer her foreclosure complaint with counter complaints.

Is there something more I can do?

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It is best to know all the facts so you can deal with them as they are so you have no surprises when you fight this foreclosure. One of the things you have going in your favor, besides being a minor when you purchased the property, is the fact that she is a broker and it sounds like she violated the law just by representing you in the purchase (because you were a minor) in addition to giving you legal advice. She is not permitted to do that unless she is an attorney. In fact, this is complex enough that you should consult an attorney about your options.

It sounds like there is a piece of the puzzle missing though: how can you buy and close on a house (when you were a minor) without a written contract? Real estate contracts are required to be written to be enforceable. (Check your state for accuracy) Your post states you were a minor when you purchased the house and I don't know how you could close on the property without providing ID to either the closing attorney or the title agent as well as the contract detailing the terms of the purchase. Did you actually close on the property in your name? Or was there a trust and you were the beneficary?

You said there was no contract signed for the house. How did you detail the terms of the purchase - orally? Since the purchase was not in writing, you have a possible exit there to explore. Was this some sort of lease-purchase or rent to own that lasted for a year and then you closed? As a minor you don't have the 'capacity' to enter into a contract so most contracts with minor's are unenforceable. However, you can not pick and chose which parts of the contract you wish to keep and those you wish to disavow. Its all or none.

The 'pretend' mortgage is a different issue. I understand that the mortgage was not signed and recorded until a year later. The amount of the mortgage would naturally be in dispute; however, that part of your post states that it was in writing so it will be difficult for you to prove a different amount. Do you have something else from her in writing that indicates the lesser amount (email/napkin in her handwriting/anything)? That would be very helpful to you. Do you have proof of the funds she 'gave' you? Was there any other type of agreement prior to this mortgage? If so, you might be able to use it to show the amount is not correct. Then you would have to be prepared to answer why you signed such a mortgage.

What does the actual note say? Normally it specifies the amount borrowed and the terms of repayment. Do you have the original note? Does the broker have the note? These are usually two different forms: the note is the promise to pay and the mortgage puts the lien against the property in case of default. BTW, a default can be anything that is specified - not just non-payment of the funds due. It can be a default in the case of taxes or insurance not being paid (that is a standard clause in most mortgages).

Contact a couple of attorney's that specialize in real estate law and foreclosure defense (not one of the scam firms). You need someone that knows SC law and how to get you out of this mess. You probably have a good case against the broker too.

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Denita thank you so much for you help!

The property was bought straight out. No lease no contract. I guess a minor can purchase property as long as they have the money? The closing attorney knew I was a minor and made my mom sign a paper saying he advised her against it though. I guess because he thought I would do something stupid. (like sign a "pretend" mortgage lol) We had known this lady all my life and trusted her completely!

I do not have the original note and I don't think she does either. I do have a copy it says:

1. BORROWERS PROMISE TO PAY

In return for a loan that I have received, I promise to pay US 175,000.00 (true amount) to the order of the lender Jane Smith 1013 South Dogwood Drive Anderson South Carolina

I will make all payments under the note in cash, check or money order.

I understand that the Lender may transfer the note. The Lender or anyone who takes the note by transfer is titled to receive payment under this note is called the Note Holder:

2, INTEREST

NO Interest

3 PAYMENTS

Time and place of payments

I will pay the principal due on 2018 which is called the "Maturity Date"

I will make payments at 1013 South Dogwood Drive Anderson South Carolina

Or a different place as required by Note Holder.

The rest is just normal legal stuff I think.

I don't have anything where the money she gave except for what was given by her in Interrogatories. There she shows the money she gave for the property and checks she claims was money she loaned my mom. One check was written to my mom that my mom says was for work she did for her. One to my uncle for work he did for her. Two to a cleaning business that my mom worked for for a short time. One to the attorney and on the check where its says "for" it says "TW Smiths estate" (her late husband) .....

All of the checks added up to maybe 5,000. She gave 50,000. and the note and mortgage is for 175,000.

The tax assessment on the property is only 98,000 at this time. I think at the time it was only like maybe 90.000

What do you mean "You probably have a good case against the broker too"?

Thank you again!!!!

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Am I missing something? She doesn't have to prove anything, you proved it for her by signing that! Only thing she has to show is a signed contract which you agree to...

You'll notice that says nothing about a house and probably where it does mention the house the only thing is says is that the house is collateral upon default. As far as I know a mortgage is just a loan with your house/property as collateral. If you didn't receive that much money, you really shouldn't have signed it. :/

This is an example of why one shouldn't sign contracts on "faith".

If I walk up to a stranger with a mortgage agreement for their house and they sign it, I just got their house if they don't agree to those terms. (As long as they are mentally fit)

I think the only options here are:

- Did you sign when you were underage or mentally incapacitated?

- Was the amount changed after you signed?

- Is there anything in the loan agreement she is showing that is different than what you have or signed?

An loan agreement happened while you were of legal age and you signed it. That's all there is to it. It's just a matter of what faith you have in the loan holder to follow up and make you pay? Sadly, it seems that faith was misplaced. As far as collecting it RIGHT NOW though in court... From what I gather you don't have insurance on the house and you didn't pay the taxes one year? Which year was that? If you don't have insurance on the house you are violating the mortgage agreement. If you didn't pay the taxes one year you violated the mortgage agreement.

If this all happened in the first or second year though you have to wonder why she is trying to collect now, years and years later? Have you remedied those 2 problems since then?

I'm sorry, I'm just not seeing the light :(

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Yea it does look kind of dim here :(...

I am not trying to act as if i know the law but is this true ". A contract must be "met with" or "supported by" consideration to be enforceable"? If so does she not have to show she gave the consideration of the 175,000.00?

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Yea it does look kind of dim here :(...

I am not trying to act as if i know the law but is this true ". A contract must be "met with" or "supported by" consideration to be enforceable"? If so does she not have to show she gave the consideration of the 175,000.00?[/QUOTE]

The consideration does not have to match the amount borrowed.

She loaned you $50,000 and wants $175,000 back in 2018. That is consideration for contract purposes.

Coltfan1972 is on the right track.

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Ok I see what you mean (I think) as far as the 2018 pay off is the consideration.

Now what about the 55,000 being past consideration. I understand that to mean is is not "good" consideration?

I have already filed my answer and did not include unclean hands. What is the chance of the court allowing me to amend my answer if (and I'm going to) retain an attorney?

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I don't know what you mean about "good" consideration or "not good" consideration.

The term "consideration" simply means 'something of value given by both parties' in the formulation of the contract.

In this case she loaned you $50k and you agreed to pay back $175k by a certain date in 2018. You apparently gave your house as collateral in case you don't keep your 'promise to pay'. There were other conditions in the note (insurance and taxes).

I think you really need to speak to an experienced real estate attorney right away. Make sure to provide all the information to him in your consultation so you can come up with a proper plan to defend against this foreclosure.

As to the courts allowing you to amend your answer, the attorney will know what to do. If he doesn't know what to do; find another one that does. You are going to have an uphill battle on this one and you need all the professional legal help that you can get.

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Wow, this is really confusing. She loaned you $50,000 towards buying the house. You bought the house (but your mother signed for it). Where did you get the rest of the money for the house? Was it your money? Your mother's money? Or did you only pay $50,000 for the house?

The other thing that's strange is that this woman would just loan you $50,000 without a contract - and then, only a year and a half later, ask you to sign something. That just seems strange.

It seems to me that the contract is saying that you owe her $175,000 in 2018, even though she only loaned you $50,000. Seems to me that she knew you wouldn't be able to pay her the $175,000 in 2018, and she'd get a house out of it!

I completely agree with the other advice you were given: GET AN ATTORNEY RIGHT AWAY!! This is too complicated for you to do yourself, and you might end up losing your house. With law, sometimes being right isn't enough; you also have to know how to respond and make your point. You need an attorney. Even if you have to borrow a few thousand dollars for the retainer, it's well worth it to save your house (and your credit rating).

The fact that she's listing checks that have nothing to do with the house as "evidence" shows she's a scam artist.

One more thing: AFTER getting an attorney (that's the top priority), I would take a trip down to the local district attorney's office and share with them everything you have. I think this approaches criminal activity, and I would at least show it to the district attorney's office and see what they have to say. If you get them on your side, that may be all you need to get her to back down.

Good luck!!!

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I don't know what you mean about "good" consideration or "not good" consideration.

The term "consideration" simply means 'something of value given by both parties' in the formulation of the contract.

Right.... "

Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, abstinence from a future action, and much more. Under the notion of "pre-existing duties," if either the promisor or the promisee already had a legal obligation to render such payment, it cannot be seen as consideration in the legal sense.

In common law it is a prerequisite that both parties offer some consideration before a contract can be thought of as binding."

"Past consideration....Generally, past consideration has no legal value. Past consideration therefore cannot be used as a basis to form a new contract."

"In this case she loaned you $50k and you agreed to pay back $175k by a certain date in 2018. You apparently gave your house as collateral in case you don't keep your 'promise to pay'. There were other conditions in the note (insurance and taxes)."

Ok.....As hard as it is to believe she did NOT loan me 50,000.00. When I was 17 she gave me 50,000.00....

When I was 18 I signed a contract for 175,000.00. She is claiming the 50,000.00 is part of the 175,000.00.

I understand the other conditions of the contract.

The way I understand it (although she did NOT loan me anything when I was 17....still a minor) even if I had been an adult and agreed that is was a loan the contract would have had to be made (oral or written) at that time or it is "past consideration"

I am retaining an attorney for sure. I'm just trying to wrap my head around the law of it all.....

Thanks again!

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I hear you...however, it doesn't look like she gave you $50k. It looks like she loaned you $50k even though she had the note and mortgage signed by you a year later. As Nrgins points out, being right doesn't guarantee a win in a court of law (paraphrased). In fact, think of it like this: you can have all the "truth and right" on your side and if you don't have the evidence to prove it you are very likely to lose. The law has nothing to do with truth and right - it is very much about evidence and how the evidence is presented.

The issue keeps coming back to the note and mortgage you signed when you were 18, not 17 yrs old. You were an adult then, presumably with the knowledge and understanding of what signing a mortgage involved. That is one of the issues you will have to overcome since the foreclosure is a response to a "default" on that mortgage. You might be better off concentrating on the fact that its been X yrs since the default and she failed to do anything prior to now. Its hard to know without all the facts, so make sure your attorney has everything so he/she can help you.

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Actually I just saw under the "Statutes of frauds" an oral contract can not be made on trasfer of property...

"Contracts for the transfer of an interest in land. This applies not only to a contract to sell land but also to any other contract in which land or an interest in it is disposed, such as the grant of a mortgage or an easement."

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Oh Denita I absolutely agree being right has nothing to do with it. I am looking at the law.....And from limited capabilities of interpreting "common law" it appears she doesn't have a leg to stand on!!!

"A "Meeting of the Minds" (Mutual Consent)'"Meeting of the Minds" (Mutual Consent)

The parties to the contract have a mutual understanding of what the contract covers. For example, in a contract for the sale of a "mustang", the buyer thinks he will obtain a car and the seller believes he is contracting to sell a horse, there is no meeting of the minds and the contract will likely be held unenforceable

Offer and Acceptance

The contract involves an offer (or more than one offer) to another party, who accepts the offer. For example, in a contract for the sale of a piano, the seller may offer the piano to the buyer for $1,000.00. The buyer's acceptance of that offer is a necessary part of creating a binding contract for the sale of the piano

Mutual Consideration (The mutual exchange of something of value)

In order to be valid, the parties to a contract must exchange something of value. In the case of the sale of a piano, the buyer receives something of value in the form of the piano, and the seller receives money.

Performance or Delivery

In order to be enforceable, the action contemplated by the contract must be completed. For example, if the purchaser of a piano pays the $1,000 purchase price, he can enforce the contract to require the delivery of the piano. However, unless the contract provides that delivery will occur before payment, the buyer may not be able to enforce the contract if he does not "perform" by paying the $1,000. Similarly, again depending upon the contract terms, the seller may not be able to enforce the contract without first delivering the piano.

Pleas tell me if I'm reading this wrong!....

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Am I the only one that thinks it is crazy to go forward without counsel? This is not a Pro Se situation.

sit down with a mortgage fraud attorney. there are options around payment. If you win the case, costs can be applied to the other party. But even if you don't, this is your home.

I work in a court house, and it is crazy to me how often people put their freedom, their kids or their home on the line because they think paying an attorney is impossible. Its not.

I would tell this story to the AG and speak to a attorney.

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Am I the only one that thinks it is crazy to go forward without counsel? This is not a Pro Se situation.

sit down with a mortgage fraud attorney. there are options around payment. If you win the case, costs can be applied to the other party. But even if you don't, this is your home.

I work in a court house, and it is crazy to me how often people put their freedom, their kids or their home on the line because they think paying an attorney is impossible. Its not.

I would tell this story to the AG and speak to a attorney.

Maybe you didn't see the several times I said I WILL be retaining an attorney!!!!!!!!!!!!!

As a matter of fact I have spoken to two different attornies and have gotten two different opinions. Now I am trying to understand the law of it all with the help of others to form my opinion. Don't be so quick to jump to conclusions.

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About speaking the AG (or your local District Attorney), the more I think about it, the more this seems to be fraud, especially how she got you to sign the mortgage, though you didn't owe her anything, and did it for 3x what she gave you "to protect the house." Couple that with the bogus evidence she's submitted to the court, and I think this is a real case of fraud.

But, again, as I said before, make the attorney the first priority, and get something proper filed in court to stop any judgment that might be forthcoming. Then, once that's done, I would definitely contact the AG's office or the DA's office. I think you have a real shot at fraud charges being filed against her.

Oh, and about speaking to two attorneys and getting two different opinions, you might need to speak with a couple more. When I got my divorce atty, I spoke with five attorneys before I was happy with one. Most will give you 30 minutes in person or over the phone for free, so it's no problem. And remember: everything's negotiable. So if they ask for a large retainer, see if you can negotiate them down to a smaller retainer that you can afford.

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