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1981 loan as follows: $3,104.84 to pay off the balance on a
previous loan from Transamerica, $1,500 to Household Finance,
$730.92 for insurance and recording fees, and $2,775.33 directly
to the Gaskins. Proceeds of the March 1981 loan (the second
mortgage) paid the balance of $7,541.42 remaining on the
February 1981 Transamerica loan, $1,331.82 to Household Finance,
and title insurance and recording fees of $206, leaving
$5,686.90 for the Gaskins. The Gaskins used a portion of these
funds to replace the broken oil burner in their home with a coal
stoker and to pave the dirt driveway at their home. On July 28,
1982, the Gaskins transferred title to their house from their
joint ownership to Mrs. Gaskins individually.
As of September 23, 1985, the Gaskins' property taxes
for1983 and 1984 remained unpaid, and the county scheduled the
property to be sold. From February through August of 1985, the
Gaskins failed to make payments on their first mortgage ($161.11
per month) and were threatened with foreclosure. On March 24,
1986, Transamerica filed to foreclose on the second mortgage,
since the Gaskins-had not made any payments ($234 per month)
since November 17, 1985. The Gaskins' default on the second
mortgage note caused the loan to become immediately due in full;
the amount due on principal and interest, plus attorney's fees,
was $15,192. As will be described below, funds were obtained to
pay this mortgage and the foreclosure sale was averted. Mrs.
Gaskins paid the 1984 and 1985 property taxes on October 27,
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