In the death of a homeowner who assumes mortgage? 34 Answers as of August 27, 2012

What happens to a home that has a mortgage on it if the owner dies? Do the owners beneficiaries (children) take possession of the mortgage?

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Law Offices of Charles R. Perry
Law Offices of Charles R. Perry | Charles R. Perry
The mortgage will be handled in the administration of the estate. One possibility is that the beneficiaries assume the mortgage, although there are others.

For instance, the house may be sold, the mortgage paid off, and the cash distributed to the beneficiaries.

In any event, the mortgage will need to be paid or otherwise processed through the estate's administration. This is often part of what happens in probate.
Answer Applies to: California
Replied: 8/27/2012
Sebby Law Office
Sebby Law Office | Jayne Sebby
Sometimes the estate pays off the mortgage and passes the property on to the beneficiaries, sometimes the executor sells the property and divides the income, and sometimes the property is transfered to the beneficiaries who are required to obtain a new mortgage. Lenders rarely transfer the existing mortgage to the new owners.
Answer Applies to: Nebraska
Replied: 8/27/2012
Law Offices of Gerald A. Bagazinski
Law Offices of Gerald A. Bagazinski | Gerald A. Bagazinski
The beneficiary can take over the mortgage. It depends on the mortgage instrument. Many mortgage companies will not question the change in ownership of the payments are kept current. If you have any questions, please contact me.
Answer Applies to: Michigan
Replied: 8/27/2012
James Oberholtzer, Attorney at Law
James Oberholtzer, Attorney at Law | James Oberholtzer
The mortgage is a claim against the land and improvements. The next owner takes subject to the mortgage. The more pressing question is whether the debt is accelerated (must be paid all at once) or can continue to be paid on the old amortization schedule. You will need to look at the terms of the Promissory Note to tell if the debt is accelerated on the death of the borrower.
Answer Applies to: Oregon
Replied: 8/27/2012
Musilli Brennan Associates PLLC
Musilli Brennan Associates PLLC | John F Brennan
Generally yes, and they will have to deal with the mortgage.
Answer Applies to: Michigan
Replied: 8/22/2012
    Jay W. Moreland, P.A.
    Jay W. Moreland, P.A. | Jay W. Moreland
    The mortgage remains a lien on the home. If it is not paid, the lender can foreclose on the property. The beneficiaries did not sign the loan and are not obligated to pay it. If there is equity in the home (i.e. the home is worth more than the mortgage), the children might want to continue making the mortgage payments, so that they can ultimately get the equity out of the home. If the home is sold at a foreclosure, the equity will likely go to the lender. If there is no equity, it might be best to let the home be foreclosed.
    Answer Applies to: Florida
    Replied: 8/22/2012
    Stephens Gourley & Bywater | David A. Stephens
    Assuming that the mortgage is not a reverse mortgage, no one has to assume the mortgage. The heirs can keep paying it if they want, or they can let the house go back to the bank.
    Answer Applies to: Nevada
    Replied: 8/22/2012
    Poole & Poole, P.A. | Wesley R. Poole
    The estate/beneficiaries/heirs would have to pay the mortgage, or risk losing it to foreclosure.
    Answer Applies to: Florida
    Replied: 8/22/2012
    The Law Offices of Laurie E. Ohall, P.A.
    The Law Offices of Laurie E. Ohall, P.A. | Laurie E. Ohall
    The mortgage company is a creditor of the decedent's estate. The children are not obligated to pay the mortgage, however, if they wish to keep the house, then the mortgage will need to get paid. The children can continue paying the mortgage, but if they have any questions about the interest rate, or anything else, the mortgage company will most likely not speak to them (since it is not their name on the mortgage).
    Answer Applies to: Florida
    Replied: 8/22/2012
    Vandervoort, Christ & Fisher, P.C. | James E. Reed
    The beneficiaries are not obligated to pay off the loan, but if the loan is not paid, the lender will likely foreclose the mortgage and the property will be lost. The lender is not obligated to permit the beneficiaries to assume the loan. The lender might insist on immediate payment of the entire unpaid balance.
    Answer Applies to: Michigan
    Replied: 8/27/2012
    The Law Office of Eric J Smith
    The Law Office of Eric J Smith | Eric Smith
    A mortgage is a contractual agreement between the borrower and the lender, and that contract typically ends at the death of the borrower. The heirs or beneficiaries inherit the decedent's right to the land, but the mortgage must be renegotiated with that lender, paid off through sale of the home or other means, or refinanced through another lender.
    Answer Applies to: Texas
    Replied: 8/22/2012
    Olson Law Firm | Edward M Olson
    You take possession of the HOUSE. If you want to keep the house... you must pay off the mortgage. If you do not pay.. the lender keeps the house.
    Answer Applies to: Michigan
    Replied: 8/22/2012
    Gordon F. Gault PC | Gordon F Gault
    The mortgage can be assumed if you go through probate.
    Answer Applies to: Illinois
    Replied: 8/22/2012
    Leonard A. Kaanta, P.C. | Leonard A. Kaanta
    The decedent's estate is responsible, you need to probate the estate.
    Answer Applies to: Michigan
    Replied: 8/22/2012
    DOUGLAS A. TULL, P.C.
    DOUGLAS A. TULL, P.C. | Douglas A. Tull
    The mortgage is a lien upon the real estate and it remains. Also, under the terms of most mortgages, "death" of the mortgagor is a "default" under the mortgage which could permit the mortgage company to commence foreclosure. If the home is "underwater", it might not be something that the children want to inherit. But if they do, I've seen mortgage companies which will work with the children and permit the mortgage note payments to continue and not foreclose.
    Answer Applies to: Michigan
    Replied: 8/22/2012
    Martinson & Beason, PC
    Martinson & Beason, PC | Douglas C Martinson II
    The mortgage is a lien on the property so whoever takes the property takes it subject to the mortgage. In other words, the mortgage must be paid to keep the house from being foreclosed on by the mortgage company.
    Answer Applies to: Alabama
    Replied: 8/22/2012
    Richard J. Keyes Attorney at Law | Richard J. Keyes
    When the homeowner dies, the home is still subject to the note and deed of trust (please note in Missouri we do not have mortgages). The owner's beneficiaries are not subject personally to the note but if no payments are made, the note holder can foreclose on the note and deed of trust beginning six months and one day after the death of the homeowner. If there is equity in the house, the best course of action is to open a probate estate and sell the house.
    Answer Applies to: Missouri
    Replied: 8/22/2012
    Law Office of William L Spern | William Spern
    The mortgagor unless the beneficiaries pay of the mortgage. If the house is valued less than the mortgage, you should let it go. If, on the other hand, the house is worth more than the mortgage, then the liquid assets should be used to pay off the mortgage or make payments on the mortgage until the house can be sold and the equity split up by the terms of a will, trust or intestate succession.
    Answer Applies to: Michigan
    Replied: 8/22/2012
    The Jordan Law Firm
    The Jordan Law Firm | John Paul Jordan
    The Mortgage transfers to the estate. If one of the heirs wants to keep the house they can continue to pay the mortgage and I'd argue the equity in the house was their inheritance. If no one wants the house then sell it and pay off the mortgage. This seems like a matter that would best be handled in a probate case.
    Answer Applies to: Oklahoma
    Replied: 8/22/2012
    Law Offices of Frances Headley | Frances Headley
    It depends on the terms of the mortgage. You should consult a real estate attorney to review the documents and advise you whether it is assumable or not.
    Answer Applies to: California
    Replied: 8/22/2012
    Hunter Law Offices, PLLC
    Hunter Law Offices, PLLC | S. Christopher Hunter
    The estate is responsible for the mortgage. The children would only be responsible for it if they agree to assume the mortgage. If you want to keep or sell the home the mortgage has to be paid one way or another.
    Answer Applies to: Michigan
    Replied: 8/22/2012
    THE BROOME LAW FIRM, LLC
    THE BROOME LAW FIRM, LLC | Barry D. Broome
    All property and debts of a deceased person are resolved in the Probate Court. The mortgage company has a lien on the property and usually files a demand in court for the money due them. If no funds are available the real estate is usually sold to satisfy the debt. Once all debts are paid the heirs will receive their portions. Barry Your financial plan is not complete until it is co-ordinated with your estate plan. Will your family be provided for when you are gone? Without a Will, the court will decide.
    Answer Applies to: Georgia
    Replied: 8/22/2012
    Timiney Law Firm
    Timiney Law Firm | Leigh Anne Timiney
    Generally, the beneficiary who takes the property as a result of an estate, takes it subject to the mortgage, or takes the property along with the mortgage. Many mortgage companies offer a "death benefit" where the homeowner can purchase an insurance policy which would pay off their mortgage in the event of their death. In the absence of something such as this, the beneficiary who takes the property takes it subject to the mortgage.
    Answer Applies to: Arizona
    Replied: 8/22/2012
    The Law Office of David L. Leon
    The Law Office of David L. Leon | David L. Leon
    The will would control. If there's no will, then the statutory beneficiaries can take the home subject to the mortgage.
    Answer Applies to: Texas
    Replied: 8/22/2012
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    Yes, the beneficiaries take the property subject to the mortgage. If a probate estate is opened, the estate will pay the mortgage while probate is pending; if the beneficiaries want to take the property "in kind," then someone will have to find the money to pay the mortgage, as very few are assumable.
    Answer Applies to: Oregon
    Replied: 8/22/2012
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    Upon the death of the owner of a residence with a mortgage, the lender oftentimes wants the property sold to cash out their mortgage, or the heirs could refinance with some lender, or if there is no value in the property, allow the property to go to foreclosure, or file a petition in the probate action to abandon the property, if the residence is underwater (mortgage greater than value of property) if part of a larger estate.
    Answer Applies to: California
    Replied: 8/22/2012
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    The lender should be contacted as to what its position is on allowing a non-borrower owner to continue with the payments.
    Answer Applies to: California
    Replied: 8/22/2012
    Mike Yeksavich | Mike Yeksavich
    If the beneficiaries want to keep the property they will have to pay the mortgage to avoid foreclosure.
    Answer Applies to: Oklahoma
    Replied: 8/22/2012
    Law Office of Anthony Roach | Anthony Allen Roach
    They take title to the property, subject to the existing deed of trust. They can't assume the obligation under the promissory note unless the lender agrees.
    Answer Applies to: California
    Replied: 8/22/2012
    Frederick & Frederick PLC | James P Frederick
    As a practical matter, no one ASSUMES the mortgage. Whoever inherits the home, or wishes to do so needs to pay the mortgage, however, or the lender can foreclose on the property. You will not actually be able to "assume" the mortgage. The lender may be willing to refinance the property, or they may want you to do that with someone else. As long as the payments continue to be made, there should not be a problem.
    Answer Applies to: Michigan
    Replied: 8/22/2012
    Meadow Walker, LLP
    Meadow Walker, LLP | Eric Meadow
    The mortgage must be paid off upon transfer of title.
    Answer Applies to: California
    Replied: 8/22/2012
    Whiteford, Taylor, & Preston | Edwin Fee
    The terms of the mortgage itself might provide that the entire loan becomes due upon the death of the owner. The personal representative of the estate or the beneficiaries should contact the lender to determine whether lender will allow the beneficiaries to assume the mortgage.
    Answer Applies to: Maryland
    Replied: 8/22/2012
    Edward L. Armstrong, P.C. | Edward L. Armstrong
    Whoever receives the house from the homeowner on his death will take the house subject to the mortgage. If the person who is going to succeed to ownership doesn't want to pay the mortgage, the owners estate will have to sell the property to pay the mortgage off.
    Answer Applies to: Missouri
    Replied: 8/22/2012
    Meissner, Joseph & Palley, Inc.
    Meissner, Joseph & Palley, Inc. | John Palley
    In most cases the children can assume the mortgage. However, in order to communicate with the bank it is typically necessary to open probate and have someone appointed personal representative of the estate.
    Answer Applies to: California
    Replied: 8/22/2012
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