My grandmother is deceased now, and the mortgage company, who is forcloseing on her mortgage, has listed me as sole defendant in the judgement for payment because I am listed on the deed for the house. Can this judgement and forclosure be reported on my credit report? Am I liable for this debt?
1. You mention a "judgment for payment". Was there a suit and a judgment entered against your grandmother, and if so, were you named in the suit as a party defendant? Some states require foreclosure "in equity", i.e., through a lawsuit. Others, such as Michigan, allow foreclosure by advertisement. This varies by state.
2. Exactly, how is the deed titled? "Grandmother and granddaughter...with rights of survivorship?"
3. If you're comfortable trying to understand the mortgage, check to see if it has a provision allowing deficiency judgments. This would allow the lender to sue if the foreclosure sale price doesn't meet the level of outstanding indebtedness on the mortgage. The suit is for the "deficiency". It may be that the lender is overreaching trying to get a deficiency judgment against you.
4. Order your credit reports from all three credit reporting bureaus by placing a 90 day fraud alert. You'll get confirmations with code numbers for ordering your reports. See if there are entries of the mortgage as having been listed as a debt of yours.
5. Some lenders are especially aggressive, and this may be one.
6. Regardless, if you are named as a party defendant in any suit for foreclosure, you will need to defend yourself. A bankruptcy attorney might be appropriate, but better yet is if you could find an attorney who does practice foreclosure defense.
You could also check local senior centers for free legal advice, talk to one of the attorneys and ask for recommendations to someone with foreclosure defense experience who could help you.
7. If you are falsely sued, you can hire an attorney to countersue and ask for damages - emotional and financial.
It would help if you had time to answer the questions posed, as I suspect there's some information missing from the whole situation (that's not an criticism, but an observation based on what you're related).
" I was told that the mortgage company was not seeking any deficiency judgment, but only to get the property back."
Verify this: Look at the initial and any subsequent pleadings - the complaint, and any amended complaint. If the intent is only to recover the property the "prayer" (a WHEREFORE, Plaintiff prays for....) should state this. If not, then there's a possibility that's not the real intent of the suit.
I don't think though that you can worry about your credit rating without being concerned about the intent and effect of the suit.
What you might do if you are willing to relinquish the property is raise the issue of negotiating a deed in lieu of foreclosure, or perhaps even a compromise whereby the bank pays you some nominal amount just to avoid the costs of foreclosure.
However, I do have some doubts about that route because allegedly the suit isn't the subject of foreclosure but rather property recovery. There may also be a quiet title action as one of the counts.
However, since you don't want the property, entering into this kind of negotiation is the quickest and most expeditious way to deed the property to the bank. I would make any agreement for a deed in lieu include the provision that if a deed in lieu is executed, that any action taken or planned to be taken to reflect this in your credit reports be prevented; this would bind the bank and prevent negative credit reporting.
You don't need to go through probate to speak with the bank. As a named defendant, you can contact the bank/plaintiff's attorney, unless you have an attorney who's handling the foreclosure on your behalf. If that case, the attorney should contact the bank's attorney.
However, if you don't have retained counsel, the cost could be as little as the cost of postage and an initial certified or priority mail letter opening negotiations with the bank's attorney. This is what I would do - make short work of this and ease your conscience and concern about your credit report.