Los Angeles Fraud/Death – 3 Properties

Original Problem:

Original owner had three children and three properties with over $1M in equity from all three houses combined.  Prior to her passing, while she was sick and on her death bed, her son created a living trust on behalf of his mother, that named him the Trustee to her estate and left him all three of her properties.  He was also able to get his mother to refinance one the three properties and pull out $300k in proceeds. Shortly after all this was completed she passed away.  The son never told his siblings of the trust or the refinancing and transferred the title to all three properties into his name soon after her passing.  About a year after her passing, he fell on hard times financially and couldn’t keep up with the mortgages on 2 of the houses that had mortgages.  One of those houses that he fell behind on the mortgage with, his sister lived in with their brother. Her mother had let her stay in that house as long as she paid for it and managed it like her own.  Which she did for many years. She eventually found out that the house went into foreclosure when I contacted her and informed her that a Notice of Default was recorded against that home.  She was shocked and outraged and told me about the other 2 houses her mother had.  Upon my further Investigation I found out that of the two other houses, one was free and clear and the other had already been lost to a foreclosure sale.

Our Solution:

I evaluated all the properties and how much was owed and their values. I quickly realized that the Brother who caused all the foreclosure had did a cash out refinance of the house the sister and brother lived and pulled out almost $300k.  The total value of the equity with that cash out refinance was about $900k. Which means that 1/3 of the estate had already been inherited by this brother.

What I proposed to the sister was to retain a couple of different attorneys to represent her and her brother in regards to her mothers Estate and the fraudulent activity we suspected of her brother.  I have very strong legal partners that I use regularly for Probate and Real Estate matters.  I would then communicate directly with her Brother to inform him of our suspicions and try to negotiate a peaceful transfer of the properties and the estate into her and her brother’s name.  By doing this, it would give his sister control of the remaining 2/3 of her Mother’s Estate to divide between her and her brother. Unfortunately, when the brother did the cash out refinance he encumbered the property his sister and brother lived in to a point that was unaffordable.  Which means they eventually would have to move out and lose that property as well.  However they would be able to fix up and sell her Mother’s free and clear home and recover some of what they lost in the property that was sold at a foreclosure sale.

PCC would finance all the attorney costs, negotiation with the brother, recovery of the remaining proceeds, rehabbing her Mothers free and clear home, relocation and moving costs and would form a Equity Partnership in the eventual sale of the last house remaining.

How your solution was successful:

We were able to convince the brother to transfer the Estate to the sister and brother. By doing so the Sister was able to form an Equity Partnership on the Rehabbing and sale of the remaining free and clear home. We rehabbed the home and sold it at full market value. We recovered the remaining proceeds from the house that was lost at a foreclosure sale. We assisted the sister and brother with all their moving and relocation needs including helping them secure a new permanent residence. The Mother’s Estate was eventually divided more equitably then before and the Sister and Brother had greater peace with how things turned out.