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Q&A: Can we take ownership of the home?

Q: We have been living in our home since 2004. The property is in my wife's relative's name, since we could not qualify because of our low credit score. We have been making the payments this entire time, and purchased the property new. Recently, my wife's relative passed away. Since we are unable to qualify for a new loan because of our low credit scores and a new loan would place payments beyond what we could afford, we stopped making payments on the loan. My wife's relative died without a will. We aren't sure what to do at this point, or what we could expect the bank to do. What course of action should we take?

A: Since the title to the home is in your wife's relative's name, you effectively don't own title to the home. While you may have been paying the mortgage, taxes and insurance payments for the property, you might be viewed more as an occupant helping with the expenses of the home rather than having any real ownership interest in the home.

It might be unfortunate that you stopped making payments to the lender. The lender will allow the property to proceed through normal channels on the way to foreclosure. And then the property will be sold to pay back what is owed on the loan.

Depending on the bank and its loan department decision-making process, if you were to get title to the home, the bank may waive its right to foreclose and call the loan due if you were to bring the loan current and continue to make payments on the loan.

But before you can consider making any more payments to the lender, you have to find out who is scheduled to inherit the home you now live in. Did you and your wife's relative ever document the relationship with the property? Was anything ever discussed regarding what might happen if the relative died? If so, it's time to dig out that paperwork, because you'll need it.

Your wife may be one of the beneficiaries, but if there are others, you might have to come to terms with them and see if they will allow you to obtain title to the property.

If the other heirs are willing to cooperate, and you are able to obtain title, you can then approach the bank and see if it is willing to reinstate the loan. If the bank reinstates the loan, it would stop any foreclosure proceedings against the home and would accept payment from you in the future.

You'll have to work fast and get some help with the other heirs. Then you'll have to approach the bank. If you don't feel comfortable doing this on your own, consult with a real estate attorney who can provide some guidance.

Ilyce R. Glink's latest book is "Buy, Close, Move In!" Distributed by Tribune Media Services.

Need some real estate advice? Send your question to realestate@newsday.com.

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