Anyone appraised a property with Life Estate?

[b r]

Got a call last week to do a URAR for a Single Family home. Lender said this one was "pretty simple" (aren't they all anymore) :x Anyway, when I went and pulled the deed, I found that the deed was made to the borrower and her sister. However, thier parents have a life estate interest in the property that was also conveyed in the deed.

Anybody done one similar to this? Obviously the borrower has less than fee simple interest. This one was supposed to go Secondary Market. NOT!

Brad

 

[Jo Ann Meyer Stratton]

Do the parents know their daughter is trying to finance their home??? The borrower only has a one fourth interest in the property and won't even have a half interest until after both of the parents have died. So unless all parties agree to the financing--the lender better cancel that order! Or the parents and the sister better deed all of their interest to the borrower.

 

[b r]

Jo Ann, the dad knows because he was there on my inspection. I called the lender today and have not heard response yet. I'm not sure I want this assignment anyway.

 

[Jo Ann Meyer Stratton]

If all owners are in agreement to the financing, then all four owners are the borrowers. If the parents and sister are giving up their rights to the property to the one daughter, then there will need to be some transfers to the one daughter before the loan closes. So, if the lender says go ahead, do the appraisal, note the single borrower name under borrower but do mention somewhere in the report that the purpose is also for the transfer of ownerhsip between family members as well as a mortgage transaction and that the reserving a life estate will no longer exist. It just all the right paper work that needs to be done in the appropriate sequence.

 

[Frank Bertrand]

Go ahead and do the appraisal; you are not a title searcher. You don't have a fee simple interest, but like others said, a fractional interest to appraise.

not hard, just think it through!!