Who is responsible for the mortgage on a quit claim deed after a grantor dies? 1 Answers as of December 15, 2016

My father quit claim deeded his house to a friend recently because he is dying and I do not want the property. When he dies, who does the mortgage go to or default to? There is still a balance and lien due on the house that he is responsible for while he is alive. And no, his friend did not take over the mortgage on the home either. He has bad credit and could not get approved.

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The mortgage will follow the property. The friend takes the property subject to the mortgage. If the friend pays the mortgage it is possible that the lender will allow the status quo to remain but the bank could force a refinance. All mortgages have what is called a due on sale clause. This will operate to allow the lender to call the loan and ultimately foreclose due to the change in ownership. Your father's estate is not obligated to pay off the mortgage. However, if the lender acts quickly enough they may be able to seek a deficiency judgment against the estate. The best option is for the friend to sell the property and keep the net proceeds of sale.
Answer Applies to: Illinois
Replied: 12/15/2016
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