BNY Mellon Bank

I have a file wherein BNY Mellon Wealth Management holds the note. ( over $649K) The property is deeded to an individual not on the note and since has died and the owner is now a Trust.  We have AOS.  Mellon wants to charge the note holder to do an appraisal.  Mellon is also requiring the note holder to submit financial documents in order to proceed with the short sale. The Deed holder and note holder are/were husband and wife.  Wife dies and husband's health requires selling the property to move into assistant living.  Any suggestions as to how to approval Mellon?  The note holder is 82 and in poor health.

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Permalink Reply by Wayne Brooks on August 5, 2014 at 2:36am
Requiring the financial documents is normal, regardless of the deed transfer. The appraisal is a bit different though. I assume this is Not a reverse mortgage?
Permalink Reply by Jill Schappel on August 5, 2014 at 3:00am

Thanks... It is a "note" not a recorded mortgage. I have suggested that note holder submit docs.  It is not a reverse mortgage.  The note holder's funds are now in an Irrevocable Trust... for the past 3 years.  When the note holder dies(82 in poor health) the Trust is not part of the estate and will not pay a dime to the Lender.

Permalink Reply by Wayne Brooks on August 5, 2014 at 5:34am

If what you say is accurate, the trust can sell the unencumbered property, and retain all the money.  Mellon would be suing the husband on an unsecured note.  If he wants to short the Note, he'll need to cooperate.

Permalink Reply by Jill Schappel on August 6, 2014 at 6:16am

The wife's estate is now the owner of the property.  The property is the only asset of the estate. So, the estate is insolvent.

Interesting thought about selling the unencumbered property and retaining the money. A mortgage is recorded with the wife's name only.. so the Estate is doing the short sale which now has pulled the note holder into play.  The note holder is going to submit documents and then we will see where the chips fall.  He does not have the money to payoff the $250K deficiency.  ... but irrevocable trust has money and the trust will not pay the deficiency.  I was surprised that the lender wants the note holder to pay for the appraisal.  Guess they can just add it to the deficiency.

Permalink Reply by Wayne Brooks on August 6, 2014 at 4:38pm
Jill, you said before there was no mortgage. Now there is. I take back what I said.
Permalink Reply by Jill Schappel on August 7, 2014 at 2:19am

The mortgage was signed by the wife... who had no income.  The husband had the assets to back the mortgage and signed a note. Estate planning. UGH!  I appreciate your comments.. it is just a bit of a mess trying to untangle... I think the bottom line is the husband will be on the hook for the deficiency.  We will need to prove that he does not have the funds and the hardship is health.  I am also working with BNY Wealth Management group.. my impression is that processing a short sale is not what they do as I was told they were waiting on the appraiser to sign the engagement letter.  This should be very interesting.

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