ArcaMax

Reader Question: I've lived in this house for 12 years. My name is not on it, but I've paid the mortgage every month. The person who has it in their name won't sign it over to me unless I pay $15,000 to them. I won't do that. If I stop paying the mortgage and let the bank foreclose on the house, how do I inform the bank that I want to retain ownership of the house?

Monty's Answer: You mention your name is not on the title. When you moved into the home 12 years ago, was there a written agreement in place that described the terms of your occupancy? For example, was there a lease, a land contract, a purchase agreement, or even an option to purchase? Was there ever a discussion or understanding, verbal or otherwise, that ownership would transfer to you if certain conditions were met? Here are seven additional considerations:

No. 1: Have you also been paying the property taxes, homeowner's insurance, or for major repairs? Has the amount you pay changed over time? These details help determine whether your payments resemble rent, a form of seller financing, or something else entirely.

No. 2: If there is no written documentation, you may be viewed legally as a month-to-month tenant. Oral agreements to transfer real estate are typically not enforceable in most states. While unwritten agreements are common in personal arrangements, the law favors documentation, especially when a dispute arises.

No. 3: You've said the person in the title won't transfer ownership unless you pay them $15,000. While that demand may feel unfair given your payment history, it's unclear from your note what discussions have taken place over the years or how the original arrangement was structured. Is this a new demand, or was a final payment always expected at the end?

No. 4: You are also considering stopping payment and letting the lender foreclose. If you are not on the mortgage, the lender is likely to refrain from communicating with you due to privacy laws. They view the legal owner as their customer. Even if you've made every payment directly to the lender, the lender may have no obligation to deal with you, and no incentive to transfer ownership without going through a legal process.

No. 5: Another consideration: What would prevent the titled owner from resuming payments and filing for eviction if you stop making payments? Is it certain that they lack the resources to take over the loan?

No. 6: If you believe you have a legal claim based on payments made or promises given. In that case, I recommend consulting a real estate attorney or a legal aid group and bringing any relevant documentation, such as cancelled checks, texts, emails, or receipts. Some states recognize "equitable interest" claims under specific conditions; however, these claims are highly case-specific and can be challenging to prove.

No. 7: Finally, consider confirming the market value of the house. You are making the payments, so you are aware of the loan balance. If the owner has no other loan against the property, their demand may be considered fair. In the twelve years you have occupied, most home values have advanced considerably.

This perspective helps you weigh your options. If you can share more background, I'd be glad to offer a follow-up opinion.

Richard Montgomery is a nationally syndicated columnist, published author, retired real estate executive, serial entrepreneur, and the founder of DearMonty.com. He provides consumers with free options to pressing real estate issues. Find him on Twitter(X) @dearmonty or DearMonty.com.

----

Copyright 2025 Creators Syndicate, Inc.