KrazyKracka

Tell you what... here's the cliff's notes first!

Mom and stepdad live above their means

Stepdad gets laid off, bills pile up.

Mom and stepdad file bankruptcy.

Bank forecloses on their house because they "forgot" a payment.

Mom and stepdad ask me to apply for a $4000 personal loan to reinstate the
mortgage.

Now, a little about me:

Had credit problems in 02-03.

Busted my ass last year at work, logged over 3,000 hours at my job so I could pay off my bills, and clean my credit up.

I now have 2 bills I'm paying on, one credit card, with a $200 (roughly) balance, and one student loan, both accounts are in good standing.


Now for the fun part:

The bank, which I'm not sure which one, TOLD them over the phone, that due to the missed payment, they need $4000 to reinstate the mortgage. There was no statement sent stating that this money was owed.

From what I have been told, they have tried to make an "over the phone" payment, which has been refused, and their attorney has tried on 3 occasions to get in contact with them over this matter.

My mother approached me about getting a $4000 loan from a bank in order to pay this bill, which I told her I didn't think I could, due to my fairly recent problems that I had been in.

I asked her to show me a statement showing the money owed, which she told me she didn't have.

I then asked her to show me a returned check for one house payment, since she said they wouldn't accept anything less than the full $4000. BUT, she told me that they've been paying over the phone for sheer convenience.

I suggested that she mail a check, because if they return it, I BELIEVE that the attorney can use that in their favor, and if the bank accepts it, then they don't have to make that full $4000 payment at once. (someone please correct me if I'm wrong here.)

She told me this was a good idea, but later on, said that I should just apply for a credit line. I mentioned again about the check, which she kind of dismissed, so right now I think something is fishy.

My mother, for as long as I can remember, hasn't always been the best at money management, and lives above her means, (credit cards).

I also have discovered that her and my stepfather have been going to a casino about an hour from here up to 3 times a week! They don't tell me because I despise gambling. What really put me over the edge was when my mother went to this place a couple weeks ago by herself with nothing more than a $20 bill.

Do they not see how much that alone is costing them????

I know that if I somehow come up with this money, which she promised to repay me, something will always happen. She'll be "a little short this month", or "another bill came in", etc. etc. and I'll get stuck with it.

I'm not trying to bash my parents at all here, I love them and would like to help them, but this isn't the first time something like this has happened, albeit nowhere near the severity of this situation.


Am I a bad person for being cautious? Should I do this? I'm not sure if my credit is strong enough yet to even get that kind of money.

The whole reason being, I wanted to pay my bills so I could leave my job for one with a steady shift, so I can go back to college.


I'm very frustrated by this situation, and I feel like I'm not being told the entire truth. I'm sure I have left some details out, which I will probably remember.

What should I do?


Any questions, even personal ones, I will answer as truthfully as possible.


Thank you for reading, and I am grateful for any advice anyone can offer.

shakran

no, you should absolutely not do it. And whether your mom is being misleading really isn't relevant. Now, that sounds weird, but here's why.

Let's say for the sake of argument that she's being totally honest and up front with you. She's been a lousy money manager apparently for her entire adult life. You bailing her out isn't gonna help her change that, and in fact it will encourage the behavior - - "the last time I charged all those nice things on my credit cards, my kid lent me $4,000. Why shouldn't I charge stuff again?"

Plus, if you lend that money to her, you might as well write it off, 'cause you'll never see it again. Let's look at the facts. She's in debt up to her eyeballs. She owes money to companies that can, and quite cheerfully will, ruin her life if she doesn't pay up. That's a VERY powerful incentive to pay them, yet she takes the money she should be paying them with and runs off to a casino with it.

You on the other hand aren't gonna send her to a collection agency, and you won't have any real ability to make her life miserable about it. If she won't be responsible enough to pay them, she certainly won't be responsible enough to pay you.

Ambient1

I think something sounds fishy, and I'd think twice about lending the money out - even to your mother.

Sometimes people get into a financial bind, and use credit and loans to get them out of a fix. But they never learn this way. Sometimes it takes hitting rock bottom to really learn how to manage money. It certainly did for me! I was seriously in debt, and my family was tired of bailing me out of the mess I was in. It was tough, but I did it on my own, and learned a lot along the way.

If you do loan them the money, make sure you secure it with some sort of collateral if you can... I'm not sure if you can get a lien on the house, so if they do default, you might get something back.

ryfo

Dont do it. My parents are same, always telling me they have no money and cant do things. I worked it out one day (they are on pension) and between them, they get more money than my husband and I and we are paying off our home! Next time they make me feel bad about money, I am going to ask them what they do with theirs (Own their home and car, no rates, insurance) If you prop them up now, I hope you have bottomless pockets!!

jorgelito

I wonder if you could possibly take over the house? Maybe if the bank forecloses, you can step in and get it for really cheap or maybe you can get it transferred to you if you make the missing payment for them. This way, you still keep it in the family. You will have the title (good for your credit and building equity) and your parents won't have to live on the street.

If you plan on helping them (which I'm not sure is a good idea), make sure you are fully aware of all the legalities involved. Get EVERYTHING in writing: how much they owe, mortgage statements, letters from the bank etc. You still got to protect your own ass.

good Luck

KrazyKracka

EVerything in writing... that's what I'm trying to do, asking for the statement, and evidence of a returned check. I agree it's the only way I can be completely sure of the entire situation. My friend seems to think that they don't owe that much and that if I DO come up with the cash, maybe half will go towards the actual house, and the rest for funtime or something, which is entirely possible.

Shakran is right, I would never turn my family over to a collection agency, but at the same time, I wouldn't be too happy on getting stuck paying a loan back either. Who would?

I too got myself in trouble when I was younger, thinking "oh I can afford that", when reality was a different story. BUT, I did work at it myself to get back to where I wanted to be, and it just blows my mind that after all these years, my mom still hasn't "caught on" to handling income.

I'm just upset at myself too, because I'm just now beginning to see the pattern that's been there since the early days of my youth.

Thanks for your replies! I appreciate them. I am very leary about doing this, and I'm going sometime today to speak with their attorney about the situation.

I'll post what I find out.

KrazyKracka

oh, another question, has anyone ever heard of a bank requesting that large amount of money to reinstate a mortgage, or refusing to take any kind of payment for that matter? I didn't think they could do that.

ratbastid

My mother-in-law has asked us for loans in the past. We don't loan money to family, but if it's possible, we'll give her what she's asking for as a gift. If she can or will give it back eventually, that's fine, but it leaves us with no bad blood or obligation hanging over the relationship.

Not that I'm saing you should do that, but... if it's going to end up being a gift anyway, you may as well call a spade a spade.

Also, banks don't forclose because you forgot one payment. They forclose because you're several months behind and have a history of nonpayment.

jwoody

If you do go through with this crazy scheme, you could be certain that the money is going where it should by giving them a cheque for the exact amount paid to whoever it is supposed to be going to.

...and I can see where Ratbastid is coming from. I doubt you'll ever see the money again but (I'm guessing) years down the line you might inherit the house that you're trying to save.

NoSoup

Well, I have a few questions for you...

First off, how much is the house worth? (approximately is fine)

Secondly, do you have any idea how much the mortgage is? If not, that isn't really a big deal - (no offence, but your parents don't seem to be in all that great of a financial situation, so I'd imagine it is near 100% of the value of the home)

_____________

Without those questions being answered, I'm going give you my preliminary opinion.

Your mother is lying to you. If you miss one house payment, banks will not foreclose on it. If you miss the last 4-6 months or more worth of payments, they will. I'm going to echo what everyone else here has said and make sure that you know that you won't ever see that money again. Be prepared to make the payments if you were to take out a loan for them, but I'd suggest you "fib" a bit and tell your mother that you attempted to get a loan, but were denied. That way there aren't any hard feelings, and you aren't out four grand. You just worked you ass off to get yourself out of the situation your mother wants you to jump right back into - except now you'd be paying for her mistakes instead of your own.

As far as her not wanted to show you any checks and her excuse being she paid over the phone - if you want proof, simply have her show you her bank account statements. I'll show the ACH withdrawal on there. If she is worried about you seeing her balances and what not, have her take a black permanent marker and cross out anything she'd prefer you didn't see. In addition, I'd make sure you get everything from the bank in writing, ususally, even if the bank is borderline foreclosing, they'll accept any payments she is willing to make - unless it is already in the 11th hour, in which case they won't to avoiding having gone through the entire process only to have it stalled right at the end because your parents were able to come up with a couple hundred bucks. Right before the foreclosure reaches the point of no return, they'll want all the past due amounts or nothing at all - but that would mean that your parents have been in foreclosure for a while.

Oh, one thing I should clarify - that $4000 that they are asking for isn't some mysterious "mortgage re-instatement fee" or anything like that - that simply is what they need to pay to catch up on their mortgage. If their payment is $700.00 a month, you can see that they missed a few more than one payment.

I don't want to bash your mother -as she is family- but keep in mind she got into this situation by herself, she could have been taking the money that she has been spending at the casino (and the gas to get there!) and putting towards something more important... like a place to live.

One other thing that concerns me is that they filed bankruptcy already - I'd be very interested how recently they filed, and what type it was.

If they just recently wiped out all their debt with the exception of their mortgage and possibly vehicles, there is absolutely no reason for them to be in the situation they are in now. All the additional funds that they were putting towards other bills are now freed up - so if they were making their payments on the house before, they certainly should be able to now.

__________________
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Just in case you were wondering...

KrazyKracka

OK, here's what I found out over the past couple days:

I went to their attorney and asked what the story was, and he told me about the money owed, you guys were right. They didn't just miss ONE, they missed a couple.

The house is 2 years old, I should have told you guys this before. They got married in 2002, and both of them already had homes, but they wanted to make a "neutral" house. This house wasn't the only mortgage they were paying on, there was still one out from before. The existing mortgage on this current one has only been opened for a couple years, so the amount owed is still quite a bit.

I'm not trying to bash my parents either, I know they care for me, and would do anything to help me if I was in a bind, but I think that's a lot to ask of someone.

Cereberus

So what happened to all the equity they had in their prior homes? I'll answer that--they gambled it away. Unless they still own them, in which case, why are they hitting you up for cash?

At the risk of being too blunt, I didn't see where they helped YOU when you were in a monetary bind.

If you loan them the money, it's gone. Don't even THINK about securing it against the house, or anything else. First of all, you won't get it out of the house. Secondly, you'll be the ungrateful child that "stole their car," or whatever security they offered, when they were "down on their luck."

You got some good advice earlier. Tell them you can't get a loan. Do you REALLY want to be $4000 further away from finishing school?

Sorry if I was too outspoken, but your post was screaming out to me.

Tracybrian

Hope this is understandable.............

I guess they could not refinance like everyone else in this situation dose.

Like Nosoup said it is all about how much they owe verses how much it is worth. The best thing to do is refinance that would solve the problem for now.

To find out the worth and how much it would cost to sell ask a realtor. If they can make a little money by getting out of forclosure and selling I would bail them out provided they agree to sell the house and pay you back with the proceeds through the escrow company. If you do get involved cut your parents out and handle it personally with the realtor, morgage company, ect. Find out what stage of forclosure your folks are in because it may be too late already.

Another option: If the house is worth what they owe and you wanted to buy the house from them you could assume the loan, saving their credit and scoring yourself a 2 year old house. Put your name on the deed and have them pay rent only if house values are going up like they are where I live.

LewisCouch

You are a good son for even considering your mom's request. I would never ask my son for such a sum of money. As an adult, I would feel obliged to do everything within my own power to raise the money. From what I infer, your parents have some serious financial problems, especially since they are unable to come up with a relatively small amount of money on their own. It's obvious that you love your mom and stepdad, however, their problems are their own. Time to liquidate assets. Business is business no matter who is involved.

My advice, don't loan them the money, however, if it makes you feel better, gift the money to them. If you do loan them the money, get a receipt. If they default on paying you back, you can at least write it off on your taxes as a loss. Small consolation, but it's better than nothing.

Good luck, let your conscience be your guide.

__________________
"The gift of liberty is like that of a horse, handsome, strong, and high-spirited. In some it arouses a wish to ride; in many others, on the contrary, it increases the desire to walk."

-- Massimo d'Azeglio

Cereberus

What happens if they don't pay the rent?

martinguerre

i really believe that family takes care of family. but what concerns me is the lack of transparancy or understanding in this situation. one payment becomes several, and the drain on the finances is still present-gambling and over spending.

4k is not going to plug this hole. and a person is under no obligation to do what they cannot. look for a good credit counselor in your area, and refer them. that's the best thing you can do for them at this point.

__________________
For God so loved creation, that God sent God's only Son that whosoever believed should not perish, but have everlasting life.

-John 3:16

KrazyKracka

Thanks again everyone for the replies. To further clarify, the house my stepdad owned, he had sold to pay off his mortgage on his old house, which he did, around the time that the new one was built. The house my mother owned however, was occupied by a tenant. That house belongs to the bank now, it was one of the things filed in the bankruptcy, which I just found this out yesterday. She had a home equity loan out on it already, which answers the question of where it went.

True, they never did help me out in my situation, but I never asked them for help either. It was something that I brought on myself, and something that I had to fix myself, which was how I looked at it.

I told them that I exhausted my options, which I wasn't being totally dishonest with them, because I only have about half that much in the bank right now.

I really think that they are avoiding the "whole" truth with me over the fact that I've expressed my discontent at gambling in general, and when they are in this situation, it only makes things worse. If they want to take a vacation and hit up a casino, hey that's great, I'm all for it. But going there an average of 2 nights a week, with not a lot to spend, just doesn't make much sense to me.

I'll fill you in with more details as I get them. Thanks again everyone!

BalloonKnots

I really feel for you. It is really unfair of your parents to put such a burden on you.

From what I've read, I get the feeling your parents have a serious gambling problem and need professional help. Let's see...they have missed several mortgage payments and yet will still gamble away what little they have by going to weekly casino trips?!!! To make matters worst, they come asking you for money/loan? That makes no sense whatsoever.

Even if you gave them the $4k to help them out this time, do they even have the means to keep up with the rest of the mortgage payments? If not, then it might be time to get rid of the house and move on.

If you have the means to AND you feel that you have to help out your parents, then just give them the money and write it off as a loss. Do not 'lend' them the money. That way you won't harbor any ill feelings when they most likely won't be able to pay you back. Having the 'means to' would mean that you can afford to repay the loan on your own. If you don't think you can handle that, then don't take out the loan for them.

Getting them credit counselling, money management, and gambling help would be the best thing you can do for them. Of course, they would have to acknowledge their problems and be willing to accept help.

They have a lot to learn from YOU!

KrazyKracka

Well the house is safe, my grandmother came through for them and got them a loan for the money, which is good on her part. I just hope that they will be able to pay her back for it, because that's a lot to ask of someone, regardless of who they are or relation. I thank all of you for your replies and advice, it's very appreciated. I agree, I really think that my parents have to start managing their money more effectively, otherwise, this situation will be doomed to repeat itself again and again. I just hope that I can convince them of what they need to do.

Thanks again all of you!

turbofish

Happy it worked out... for now... I believe history will repeat itself, especially if they have a gambling addiction. Do they know that you know of their gambling trips?

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macmanmike6100

I wouldn't do it; clearly she's having serious (not just minor) financial troubles. Lending her money will only hurt your ability to take care of your own financial troubles; although it's your mother, you should try to see it objectively as a person who has a habit of spending unwisely.