Imagine inheriting a home from your parents or grandparents, spending hundreds of hours and several thousand dollars rehabbing it, then discovering there's a mortgage on it that the bank says you must pay. One family's inheritance nightmare should be a lesson for everyone.
Family spends months working on home
Josh Putney showed us the home that has become a labor of love for his family. This dad, his wife and his three children spent months stripping wallpaper, repairing beams and restoring the old home they inherited from their mother and grandmother when she passed away a year ago. "All the plumbing up in the ceiling had to be replaced," he said. "And the old plaster was starting to come off the walls. We are doing a lot of patchwork." It has been a family affair. "My boys have done a lot of work. My daughter's done a lot of work," he said.
They say everything was proceeding just great until the day they received a letter from the bank telling them they owed money—a large sum of money. A bank informed them they owed $30,000 on the inherited home. Lori Yazell, daughter of the deceased and executor of the estate, thought they had inherited the house free and clear. "It was a shock because I thought the house had been paid off," she said. But it turns out that while the original mortgage had been paid off decades ago, there was another one the family didn't know about. "My mom had taken a mortgage out on the place to have it fixed up, but then she passed away," Yazell says. Yazell says the bank holding the new mortgage wanted a lump sum, and would not let them convert it into a new mortgage, possibly due to their poor credit history. A bank representative requested at least $4,000 immediately for them to keep the home, she says. So we contacted the bank. which now says it will try to work something out with the family.
Family desperate for help
The family hopes so, because they are desperate to hold onto the house. "This house means a lot to me, my brother, and my whole family," said Jareth Putney, 14. They don't want to lose all their hard work and all their memories. "Mom was a big part of this house, a big part off all our lives," Yazell said. "And to see it go away, it's just heart wrenching. It's just heart wrenching." But there is a lesson here for everyone: If you inherit a house—and many people will—have a lawyer do a thorough legal inspection, to make sure it is free and clear of all liens, mortgages, and tax claims. That way you don't waste your money.
This story originally appeared on Don't Waste Your Money. Checkout Don't Waste Your Money for other great tips and ideas to make the most out of life.