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Sticky Situations: Bankrupt Mortgage Lender and $10,000 Engagement Ring

Money matters can affect every area of life, often stirring up emotions of worry, fear, anger, and resentment. If not dealt with swiftly, those feelings can turn to bitterness, which can eat a person from the inside out.

How to avoid that bitterness thing from taking hold? Talk it out. Ask for help. Get advice from someone you trust.

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Dear Mary: I just read that the company that holds my home mortgage is under investigation by the Feds, has a net worth of negative 63 million dollars and is expected to file for bankruptcy. This company holds title to my house. If it goes bankrupt, am I at risk of losing my home, even though I’ve never been late on my payments?

I don’t want to refinance with another company because I am locked in at a great rate for the life of the loan and refinancing would cost a lot of money. Angela

Dear Angela: From what you’ve told me, I don’t think you have a thing to worry about. I do believe you have stated incorrectly that the lender holds title to your home. I am quite certain the title is in your name, with the lender having a lien on the property secured by a note and deed of trust.

That said, the fact that your lender may be going bankrupt should not affect you at all. Your loan will be sold off or assumed by another lender subject to the terms and conditions you agreed to when you signed it—terms that will not change. You have a legally binding contract that not only obligates you but also protects you.

I would caution you to watch your mail closely and to be wary—even suspicious—of anything you receive regarding this matter that does not come from your current lender. They will send you a directive about where to send your payments in the future and who will be servicing your mortgage. These days there are crooks who prey on the vulnerable and take advantage of people who are facing unfamiliar yet public situations. I predict that at the very worst you will receive a letter instructing you to send your payments to a new address.

Should you receive anything more than that, make sure you speak with an attorney or real estate professional you trust.

Don’t miss: Mary’s Home Remodel 2018

Dear Mary: My father, age 85, bought a $10,000 engagement ring for a lady he intended to marry, but never did because he became sick, then passed away. Up to the very end, he was certain that they were going to get married. Sorry to say, my siblings and I were not crazy about the woman, especially the more we got to know her. And, no one can replace or take the place of my mom who passed away two years before he did. Would it be customary for her to keep the ring? Diane

Dear Diane: That is a very sad story and I am so sorry for this added grief on top of losing your dad. As for the engagement ring, there is no law or rule. However, courts have ruled in cases where the promise was made (engagement) but did not end in marriage, that the one who paid for the ring was entitled to have it because a promise made was never consummated. Your situation seems to be somewhat different than that because, in a very morbid sense, it was your father who could not keep his promise to marry.

I suppose that in the worst case ever, you and your siblings could sue for the ring to be returned to his estate. But I cannot imagine it coming to that—let alone a judge anywhere finding for the plaintiff.

This woman’s possession of the ring plus the circumstances would more than likely convey ownership to her. She could sell the ring or give it away—both of which would indicate that ownership. Taking this to small claims court would be one for reality TV perhaps, but I don’t think that in the end you would prevail.

My advice is to see this as a gift your father gave to his intended and a relationship which brought him great happiness. That he died before they could be wed must have been especially heartbreaking for everyone involved—including his fiancé.

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