If the loan agreement for a mortgage wasn’t signed by the lender, is the agreement valid?

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If the loan agreement for a mortgage wasn’t signed by the lender, is the agreement valid?

My parents’ house is in foreclosure. Since they passed away, the bank has listed me as a defendant even though I had nothing to do with their loan. The foreclosure hasn’t gone to hearing, however the bank has removed stuff from the house and altered entrances into it. The sheriff’s civil division said the bank cannot touch the property yet because it has not gone to hearing. Also, the officer and I were going through the court papers and discovered the loan wasn’t signed by the lender. What

are my options?

Asked on May 9, 2018 under Estate Planning, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) The sheriff's officer is correct: until foreclosure is complete and the bank acquires title, they may not make changes to the structure. They also may not take or dispose of any personal property in the home, since such is not subject to the mortgage in any event and they could be used for its value.
2) Even if the bank did not sign, if your parent's signed and received the money, the mortgage is valid and enforceable. Them indicating their agreement and receiving "consideration" is sufficient to create a contract.
3) You are named not because you are liable under the loan, but because you have a potential interest in the home as a presumptive heir and have to be named to give you a chance to protect your interest, if you choose to do so.


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