Can you legally in the state of Pennsylvania sell a house for ONE DOLLAR while still owing money on the mortgage? Would the buyer have to pay off the balance? This question results as a relative was supposed to inherit a house but another relative went behind everyones back and purchased the house for a dollar but there was thousands owed on the home?
Answer
Selling the house would violate the due on sale clause to the mortgage. If the bank chose to enforce this, the whole balance of money due on the house would be owed.
You do not provide enough details. How could someone purchase a house for $1? Who is this? That is stupid what the "buyer" has done. It would be better to inherit the house when the owner dies. The new owner would then take subject to the mortgage.
Was there a new deed? If not, then the house is still owned by the owner. What about the mortgage? Whose name is that in? The mortgage lender is not just going to send the bills to someone else. So where are the bills going?
The owner or buyer of the property need to consult with a real estate attorney who practices in the county where the land is located and get this transaction done correctly if the buyer wants to buy the house and the seller wants to sell it. This will require the buyer to get the cash together or get his/her own mortgage.
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