Foreclosure on mother's mortgage

[Guest MBERISA]

Does the s/h definition allow a hardship is you are not the owner of the home? If you are living with your mother and it's your principal residence, can you take a hardship to prevent her foreclosure?

[masteff]

I'd make the case that it prevents eviction.

[QDROphile]

If you argue that it prevents eviction, would you require some sort of contractual arrangement that gives the participant the right to live in the house? Normally the prevention of eviction is solved by money becuase of the contractual relations that center on money. But if this person is not paying rent, the person probably has no right to the housing -- Mom could evict and money would have nothing to do with it. If the participant is preventing eviction with the hardship money, shouldn't there be some assurance that the payment will protect the ability to remain in the house to the extent the house is kept out of foreclosure? An how far and long would that right extend?

[Tom Poje]

1.401(k)-1(d)(3) indicates you can take hardship for employee, spouse [or primary beneficiary- as added by PPA]

[Guest Sieve]

But what if the plan has not adopted designated beneficiary hardship distributions?

The wording of the principal residence foreclosure language does not require the mortgage to be in the name of the participant, and I'd suggest that the drafters, in that language, contemplated that many in the workforce would have a principal residence of their childhood home, where Mom & Dad continue to have a mortgage on that residence--or where one person lives in a home, without paying, which is held in the sole name of another party (perhaps even in the name of one spouse but not in the names of both spouses). Foreclosure on that mortgage, although not held in the name of the participant, would appear to meet Treas. Reg. Section 1.401(k)-1(d)(3)(iii)(B)(4).

[BG5150]

1.401(k)-1(d)(3) indicates you can take hardship for employee, spouse [or primary beneficiary- as added by PPA]

Is the mother primary beneficiary?