My sister is in default on mortgage payments to my mother and owes a huge balloon payment as well as many back principal and interest payments. The way the loan was written my mother could currently foreclose because of my sister missing one payment. If my mother accepts a payment in any amount does that negate my sister being in default?
Answer
No.
Answer
Ordinarily, no. Any particular loan agreement may contain oddball definitions of "default" and "cure", so I'd advise reading the sections of the loan agreement covering these topics.
Separately, I'd say that the "correct" way to handle a situation such as you describe will vary from family to family, depending upon many individual and personal factors including the ages and health of the relatives, their closeness, any plans that may exist regarding inheritance, and so on, but as a general rule I'd think your mother should not extend more charity than a commercial lender would, and the time may be nigh to begin foreclosure proceedings by issuing and recording a Notice of Default.
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