Did all three wives have the same type of cancer? What, specifically did your Mother have?
Of course, if he married three times in his 70’s, it’s a coincidence, but not impossible.
If your knowledge of commercial law is as good as your knowledge of constitutional law, I’d say your fucked.
And this just further proves my point about this being a cut-and-dried case. Either legal precedent or NC statute is going to give a clear, unambiguous answer on this. I don’t see why the case should take more than an hour in court.
That’s pretty much my take on it. The bank probably can’t touch the 2/3rds that go to the surviving offspring, but will get the 1/3 the step dad had a valid interest in.
I think it’s going to be because the bank had no knowledge of an estate settlement that was pending. Even if they did a title search, cedman and his siblings names were not on the title. The bank certainly can’t be expected to know about the probate issues if a probate hasn’t been opened, so that’s probably some defense for the bank. It’s going to take time to straighten things out even if they are straightforward.
The idea that all heirs must approve before an intestate estate can be settled seems dumb. For instance, suppose hypothetically now that it is only cedman and his much younger brother who are legal heirs, but cedman is looking a bit sick these days and his younger brother decides to not agree to settle until after cedmen kicks off. I have a hard time believing that one person can block it for as long as they can as it behooves most everyone to settle the estate in a timely matter. But I admit I know nothing of NC.
Goes toward intent to defraud.
All three developed leukemia.
If there were a way to give your spouse leukemia, I wouldn’t currently be paying alimony.
Title search would have shown that step-dad’s name was not on the deed either and would have raised enough questions that the loan would not have been processed.
There are more dumb laws in NC than can be listed with the bandwidth SDMB has available! 
:
:eek::D:eek::D:eek::D:eek::D:eek::D:eek::D:eek::D:eek::D:eek::D:eek:
Thisis a concern that we have to research and deal with.
I’m afraid to say that the bank may in fact have an interest in the house.
First off, I am not a North Carolina lawyer and I am not your lawyer, so my answer is really “just some guy off the internet” and deals only with the general principals of the law, and not your individual situation. Unfortunately, you will probably have to have a local lawyer assist you to clear up the situation.
Like most other states, North Carolina provides that title to property goes to a decedent’s heirs at the time of death. Specifically N.C. General Statutes 28A-15-2(b) provides: “Real Property. The title to real property of a decedent is vested in the decedent’s heirs as of the time of the decedent’s death; but the title to real property of a decedent devised under a valid probated will becomes vested in the devisees and shall relate back to the decedent’s death, subject to the provisions of G.S. 31‑39 [relating to will probate requirements].”
In other words, when someone dies without a will, ownership of any real estate owned by him or her immediately passes to the persons entitled to take under the intestacy laws, though this is subject to the right of the administrator to sell the property to pay debts of the estate if necessary. This web page I Inherited Real Estate - Where’s My Deed explains in some more detail.
Under this law, as soon as your mother died, your step-father became the legal owner of a one-third “tenant-in-common” interest in the house. This gives him certain rights to the property, including the right to sell or mortgage his one-third interest, though these rights cannot directly affect the remaining two-thirds owned by you and your siblings.
So, what it appears he did is went to the bank and took a mortgage out on the one-third of the house that he owns. Legally, you and your siblings own the two-thirds of the house free and clear, but the one-third of the house that your step-father owned (now part of his estate) is encumbered by a mortgage. If the bank wants, it can foreclose on the one-third of the house that it has an interest in, but it can’t affect your two-thirds.
But, and here’s the problem, to sell the house, you have to get the bank to release the mortgage on your step-father’s share. Legally, they are only entitled to one-third of the sale proceeds, but you need them to sign off on any sale, unless you file a court proceeding (known as a “partition action”) to sell the encumbered interest without their consent.
In short, it appears the bank does have an interest in the one-third of the house that passed to your late step-father after your mother’s death, and though they won’t be able to collect any more than one-third of the value of the house, it may well be a legal nightmare to get the house sold. (I’ve dealt with a similar situation in New York, and it was a royal pain and quite expensive for the non-deadbeat owners of the property.)
Good luck.
Per the above by Billdo regardless of how the loan was made, if he owes $ 48,000 it sounds like you are going to lose this case. You may want to try and settle this before attorney fees get added into the mix after the Judge rules in their favor. That could easily be another $10,000 - $20,000.
Thank you! You seem very knowledgeable on the subject so I have a question… what is the liability of the bank in lending in excess of the 1/3 share?
(home value 140k and the initial loan was 60k, present loan balance 48k)
They lended in excess of 1/3 becasue your step father was entitled to more than 1/3. He is entitled to the first $30,000, and an additional 1/3 of the remaining value. Cite.
In this case, that would be a little more than $68,000. This is based on the $145K valuation contained in the OP.
This is absolutely not my area of expertise, and not my state to boot.
But… from your cite:
That says that the first $30,000 in personal property is the spouse’s – not real property.
I see. Then I guess it’s conceivable that the bank valued the house at higher than 145k. Otherwise, something smells very fishy with this story. I’ve been on both sides of the mortgage process numerous times since 2008 (once with BB&T), and it’s been a royal pain in the ass every single time. They don’t just throw out notes on a whim these days.
ETA: On the table at the bottom of that cite, it refers exclusively to personal property. I’m wondering if there is a different rule entirely for real property.
Here is a link to the statutes. It confirms what the OP says re. 1/3 of real property in a situation where the spouse has more than 1 child.
I don’t think the bank has any “liability” as such, just a limited ability to collect on their security.
When you take out a mortgage loan from a lender, it is really a two part transaction. First, you sign a “note,” which is an instrument saying that you owe the lender the value of the loan. Second, you sign a “mortgage” (in some states a “deed of trust”), which is an instrument saying that, as security for the note, if you don’t pay the lender back under the terms of the note, the lender can foreclose on the mortgaged property.
There is no particular requirement that a lender take a particular value of security (or any security at all) for a loan, and if the lender chooses to take a mortgage on property worth less than the value of the loan, the bank is just at a greater risk of not being repaid. Typically, where a bank chooses to lend money without security or with less security than commonly 0required for home mortgages, the bank will charge the borrower a higher interest rate than the bank would charge on a “standard” home mortgage. In particular, mortgages that comply with requirements for the bank to sell the secondary market, such as to Fannie Mae or Freddie Mac, will typically have the lowest interest rates.
Obviously, the loan to your step-father didn’t comply with the Fannie/Freddie requirements, and was most likely underwritten by the bank a “personal” loan to him, with the added backing of an interest in the real property, rather than as a standard mortgage.
What this means is that the bank has a claim against your step-father’s estate for the full balance due on the loan. It also has a claim against the house for up to a maximum of one-third of the value of the house. The bank, does not, however, have any claim against you or your siblings personally, or against your two-thirds intererest in the house. If the loan remains unpaid, the most the bank can do is foreclose against the bank’s one-third interest and, after foreclosure, get a court order to sell that one-third interest in a public auction.
If you want to sell the house, however, the difficulty is proving the value of the home (or the one-third of the home) to the satisfaction of the bank so that they release the mortgage in exchange for the value of their interest. Even if you put it on the market, and a find a buyer at a fair market price, the bank is not required to accept one-third of the amount and release its mortgage (though it can voluntarily do so). To legally compel the bank to take one-third of the value, you need a court order of “partition and sale”, which usually involves an auction of the property “on the courthouse steps” (or wherever they customarily do so in your jurisdiction).
As another way of thinking about this, let’s say your step-father borrowed $60k just on his personal note, without signing over any interest in the house. After your mother’s death he would be entitled to a one-third interest in the house, and upon his death, that one-third interest would pass to his estate (or to his heirs), subject to the payment of his debts at death. Although I don’t know whether he had any other assets or debts at his death, it seems to me that his one-third interest in the house would ultimately have to be given either to his creditors or his heirs, and you and your siblings would never have any interest in that one-third of the house.
Because the bank got a mortgage on your step-father’s one-third interest in the house, it gets first crack at satisfying its loan out of the sale proceeds, but because your step-father died after your mother, he and his heirs and creditors would be entitled to that one-third in any event.
You don’t say what you intend to do with the house, but if you want to sell, my recommendation would be to contact the “workout” department of the bank. I would also recommend that you get advice from a local lawyer experienced in this area.
Once more, good luck.
Let’s go one step further. Stepfater paid (let’s say) $10,000 in principal on the loan before waking up dead. House sells for $180,000.
Does the bank get $50,000 or $60,000 or min[principal left on loan, $60K]?
The remaining principal.