Is there any way to fix this?

Submitted by laubold07 on Sun, 03/27/2011 - 18:43
Forums

about 7 years ago my parents attempted to refinance home to avoid foreclosure and were denied. We were convinced to put home in my name to get approved for new mortgage. There was a gift of equity for $136000 in mortgage agreement that i signed. I have no clue what this money is and NEVER received these funds. 2 years ago my parents filed for bankruptcy and mortgage trustee is suing me for gift of equity. Judge ruled in favor of plaintiff but never gave a solution to repay funds. 2 days ago trustee ordered freeze on my checking account. Up to this point I have given trustee all of my financial information requested and they have never given any solution to repay funds. Freeze came with no warning. I am 29 years old living in NJ and do not want to be haunted for the rest of my life. What can I do?

Anonymous (not verified)

You and your parents should have discussed this equity issue with a tax professional or CPA at that point of time. A gift of equity is actually an amount worth the home equity which is being transferred from the seller to the buyer. So in your case it got transferred from your parents' name to yours.

Now, the gift of equity requires the seller to sign a letter stating the fact that it is just a gift and hence there's no obligation to repay it. That's why I'm a bit confused over here as to why you're being sued. Discuss this matter with a tax consultant and see what he has to suggest in this regard.

Mon, 03/28/2011 - 10:46 Permalink