What happens when a person dies with a mortgage? 10 Answers as of September 21, 2011

It depends upon what happens to the property which it encumbers. Generally, property is sold and mortgage is paid off. If you are not going to keep property or can't pay mortgage, then lender will foreclose on the property encumbered by the mortgage. You will not have any liability if your Mother was the only one on the mortgage.

In Florida, if the decedent's mortgage is not paid, then the mortgage holder has the right to foreclose on the property. This should not affect the beneficiaries' credit, so long as they are not on the note and mortgage.

The mortgage is secured by the home. The mortgagee can foreclose on the mortgage if it remains unsatisfied.

A mortgage company's lien on the property continues at the death of the mortgagee. If payments are not made, the death and opening of a probate estate does not generally stay their ability to foreclose.

If they're not getting payments, the mortgage company will foreclose. You need to decide whether there is equity in the house, and whether there are resources in the family to save it.

Assuming she did not personally guarantee the loan, the lender is limiting to foreclosing on the property.

The mortgage is a security agreement on the house and if it is not paid, the mortgage company can foreclose on the house and sell it and keep the amount of the mortgage plus their costs, including attorney's fees, for the sale of the property. If there is equity in the house, you could sell it to someone and pay off the mortgage, however, an estate would have to be opened to sell it. Sometimes the banks will allow a short sale to get it sold. That is where the bank would take less money than is owed on the mortgage.

The mortgage company will likely foreclose on the property. It is unlikely that the beneficiaries will have any liability regarding the debt unless they co-signed for the mortgage. You should speak with an Estate Planning Attorney to provide you with specific advice for your particular situation.

At the end of the day, the mortgage company will need to be paid - either through selling the house or through allowing a foreclosure. It would be a good idea to contact the bank to tell them that she passed away and try to work out a plan with them where you can make some payments or agree as to when the house will be sold.

If it was a reverse mortgage, it is now fully due and payable. If it was not, the lender may allow payments to continue or may call the loan due. If the loan is not paid or payments continued if allowed by the lender, the lender can commence and complete foreclosure of the property.