My Parents Were Sued by Landlords Mortgage Company. – Jacob


“Dear Steve,

My parents were sued by a mortgage company that took over the house they lived at (almost a year ago). The landlord at the time went with my parents to court. She agreed to pay the settlement ($2400). We got her to sign an agreement with her saying that she would pay the amount. My parents signed the settlement at court saying that they were going to pay the amount.

By trying to be safe, the landlord signed an agreement saying she will pay.

During the whole time, my parents were in a lease with the landlord and paid the rent on time every month.

Long story short, the landlord is in jail (for I believe mortgage fraud) and she never paid the settlement.

We contacted her husband and he said he isn’t in the position to pay.

Debt collectors have been sending letters, with interest on the original debt.

My parents do not have the money to pay.

What do you think my parents should do?


Dear Jacob,

Okay, let me get this straight. The original landlord seems to have been foreclosed on if the mortgage company took over the loan. There was a court case and your parents were sued by the mortgage company now handling the property. At court, your parents agreed to pay the mortgage company $2,400. The landlord agreed to reimburse your parents, but didn’t, and is now in jail for mortgage fraud.

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First off, in legal matters you need to talk to a licensed attorney in your state for legal advice. I am not a lawyer.

Here is what I think may have been happening. The property was foreclosed on, the mortgage company became the landlord, the rent payments may have been given to the old landlord instead of the bank now holding the property. That might be how your parents wound up getting sued instead of the original landlord. It’s the only logical connection I can see between the mortgage company and your parents.

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Your parents agreed to pay the amount based upon the promise of the landlord, who turned out to be a liar.

Worst case scenario here is that the landlord lost the property to the bank and did not tell your parents. Your folks kept paying the landlord rent payments she was not entitled to collect. Your parents agreed to pay the suit based on a promise by the deceptive landlord.

It is all very confusing but I think the first thing you need to establish are the facts. So many open questions.

I really think you need to speak to a local attorney for assistance in this matter. So much is at stake and so much information is missing.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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