After the death of my sister, my mother finds out she had taken a mortgage out on mom's home. The deed and taxes are only in mom's name.

The bank came out taking pictures yesterday. Mom is 72 years old and can't go through this mess, what can we do?

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    First; I am sorry for your loss. Let me continue saying your are seeking legal advice and nobody here is a lawyer; please retain legal services. That said, this community will have some expertise to give you a place to start looking. Please confirm anything you read here with your counsel. To get the best advice, please give us your location (country) and some back story on how you know about the fraudulent loan. – MrChrister Oct 21 '14 at 14:35
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    As MrChrister says, this question cannot be answered here. One obvious place to start is to ask your mother if she ever gave your sister a power of attorney to get a loan with the home as collateral, or whether Mom ever co-signed a loan application by your sister in which the home was pledged as collateral. These are the kinds of things that people do and forget, even if advancing age causing memory loss is not an issue to be considered. That is, the loan might not be fraudulent as MrChrister calls it; it may be perfectly legitimate but just forgotten. – Dilip Sarwate Oct 21 '14 at 14:46
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    To get the best answer here and not get lots of "This is a legal question" comments, you can change your question to: I think I need to get legal counsel, what financial, mortgage, or contract information should I bring and have ready when I talk to them? What questions should I ask so that I hire a good counsel for this financial issue? How do I go about finding a lawyer that is familiar with mortgage issues like this? etc. etc. – Alex B Oct 21 '14 at 16:04
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    Let me also add that you need a real estate lawyer. Don't go hire a divorce lawyer or a local DUI lawyer. – ssaltman Oct 21 '14 at 18:58

As others have said, this is largely a legal question.

The first issue is, did your mother sign the loan documents, or give your sister a power of attorney? If not, the loan may be fraudulent. If your sister did not have any legal title to the home, well, I'm not a lawyer, but I don't see how she could legally take out a mortgage against property that she doesn't own. If your mother never signed a relevant legal document, I don't see how she could be liable.

If she DID sign the loan papers or a power of attorney, but your sister misled her about what these were for, she might still have legal recourse.

So step 1: Find a lawyer. Bring the loan documents, any paperwork you've received from the bank, and the deed to the property. Let him tell you where you stand. I don't know what country you live in, but here in the U.S. you can usually have such an initial meeting with a lawyer for a modest cost or even free -- I've paid between $0 and $50 for such meetings. Then go from there.

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