Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
What Happens When The Sole Owner Of A House With An Upside Down Mortgage Dies?
Old 09-14-2009, 09:12 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
What Happens When The Sole Owner Of A House With An Upside Down Mortgage Dies?

What Happens When The Sole Owner Of A House With An Upside Down Mortgage Dies?

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-14-2009, 09:14 PM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,822
I am not a lawyer, but I would assume that before any distributions could be made, the estate would pay off the mortgage along with other debts of the estate, wouldn't they?
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 09-14-2009, 11:25 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by haha View Post
What Happens When The Sole Owner Of A House With An Upside Down Mortgage Dies?

Ha
He/She spends eternity in the dark silence of death.

Why do you ask? I thought you were renting.......
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 09-15-2009, 02:23 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by youbet View Post
He/She spends eternity in the dark silence of death.

Why do you ask? I thought you were renting.......
God, everything I say isn't necessarily my personal situation.
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 09-15-2009, 07:56 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
Quote:
Originally Posted by Want2retire View Post
I am not a lawyer, but I would assume that before any distributions could be made, the estate would pay off the mortgage along with other debts of the estate, wouldn't they?
I agree. Also not a lawyer, but served as an Alternate and primary Executrix for 2 estates, with legal counsel all throughout to keep me straight and fully legal.
The Executor has a duty to satisfy all outstanding debts prior to doing any distributions from the estate. There could be other factors involved, like mortgage insurance on the sole owner's life to pay off the outstanding principal.
My guess (out on a slender limb here) is the lender will take possession of the house by default unless the estate continues the mortgage payments until the probate process is completed.
What I don't know is if other estate assets, like house contents and tangible property and bank accounts and investments, can be appropriated to satisfy the balance.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 09-15-2009, 03:03 PM   #6
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
The lender will likely foreclose and depending on state law may or may not be able to file a claim for a deficiency against the estate.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 09-15-2009, 03:17 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by haha View Post
God, everything I say isn't necessarily my personal situation.
Just wanted to see if you were reading the responses..........

BTW, good question.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 09-15-2009, 11:26 PM   #8
gone traveling
 
Join Date: May 2006
Posts: 1,036
Quote:
Originally Posted by Martha View Post
The lender will likely foreclose and depending on state law may or may not be able to file a claim for a deficiency against the estate.
I do not believe there is any jurisdiction in the United States that would allow a foreclosure because of the death the owner.
__________________
honobob is offline   Reply With Quote
Old 09-16-2009, 04:33 AM   #9
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 291
Quote:
Originally Posted by honobob View Post
I do not believe there is any jurisdiction in the United States that would allow a foreclosure because of the death the owner.
I'm confused; why wouldn't there be a foreclosure? I'm pretty sure the mortgage holder wouldn't write off the debt and release the deed. I think the bank would foreclose unless the estate was making the mortgage payments.
__________________
bubba is offline   Reply With Quote
Old 09-16-2009, 09:59 AM   #10
Recycles dryer sheets
 
Join Date: Oct 2007
Posts: 332
The lender could institute any legal remedy available to it inluding foreclosure if the mortgage went into default. For what constitutes a default what are remedies you would have to read the note and mortgage. The most common default of course is non payment of amounts when due. I suppose even death or insolvancy of the debtor could be and event of default. I sure that death itself does not wipe out any deficiency. Of course as another poster stated the deficiency obligation could be different depending on the State- Ca. being a notable one. I'm not a lawyer either.
__________________
cashflo2u2 is offline   Reply With Quote
Old 09-16-2009, 02:10 PM   #11
Full time employment: Posting here.
 
Join Date: Oct 2006
Posts: 898
I figured it wouldn't take long for confusion to occur over a simple question, where the simple answer is to consult a lawyer, in the jurisdiction where the property is located or where the individual's estate might be probated, and not troll for legal advice over the internet.
Bring all relevant papers to the lawyer such as the deed, promissory note, mortgage/lien instruments, mortgage balance statements from the servicer, tax bills, divorce decrees, outstanding judgments, and a will, if one exists.

In the space of a few posts, we've covered a lot more than 1st year law students would cover in a real property class during the first week of law school: decedent estate distribution, mortgage foreclosures, deficiency judgments, abatements for actions caused by death of a debtor, events of defaults under promissory notes or mortgage/lien/trust deed instruments, and someone was on the verge of bringing in civil procedure concepts of in rem actions against the property staddled with a lien or in personam actions against the estate of the decedent.
__________________
Someday this war's gonna end . . .
ChrisC is offline   Reply With Quote
Old 09-16-2009, 02:46 PM   #12
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Quote:
Originally Posted by honobob View Post
I do not believe there is any jurisdiction in the United States that would allow a foreclosure because of the death the owner.

I said "likely" foreclose. The lender is upside down, why would the estate try to sell the house when there isn't anything in it for the heirs?

Chris has a good point, it all is a matter of state law which varies. Nevertheless, if the property is worth less than the debt it is most likely that the lender will end up foreclosing at some point. Maybe a deed in lieu is possible from the personal representative, but what I have seen most often is the heirs walk away and the lender forecloses. At least this was true in the two states where I was licensed.


Don't forget my signature.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 09-16-2009, 02:52 PM   #13
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Quote:
Originally Posted by ChrisC View Post

In the space of a few posts, we've covered a lot more than 1st year law students would cover in a real property class during the first week of law school: decedent estate distribution, mortgage foreclosures, deficiency judgments, abatements for actions caused by death of a debtor, events of defaults under promissory notes or mortgage/lien/trust deed instruments, and someone was on the verge of bringing in civil procedure concepts of in rem actions against the property staddled with a lien or in personam actions against the estate of the decedent.
Not that there is anything wrong with that. People here are curious about how things work, whether it is taxes, treatments for prostrate cancer, financial planning, to whatever someone can dream up next. I don't think the curiosity is trolling for advice and specifically I don't think Ha is trolling for legal advice, he is just curious as to what may happen.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 09-16-2009, 02:56 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by Martha View Post
Not that there is anything wrong with that. People here are curious about how things work, whether it is taxes, treatments for prostrate cancer, financial planning, to whatever someone can dream up next. I don't think the curiosity is trolling for advice and specifically I don't think Ha is trolling for legal advice, he is just curious as to what may happen.
This is correct, Martha. While I do own property, there is no debt on it, and I live in an apartment.

Quote:
Originally Posted by ChrisC View Post
I figured it wouldn't take long for confusion to occur over a simple question, where the simple answer is to consult a lawyer, in the jurisdiction where the property is located or where the individual's estate might be probated, and not troll for legal advice over the internet.
By this logic, 90% of the threads on the board would disappear.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 09-16-2009, 03:58 PM   #15
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
But I like to troll for advice, if not legal, then at least travel, leisure, investment, or other activities. Ha's right--why else would we be here? For the biscuits and gravy?

I kinda liked youbet's answer, though. That pretty much sums it up.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 09-16-2009, 04:09 PM   #16
gone traveling
 
Join Date: May 2008
Posts: 3,864
Quote:
Originally Posted by Sarah-in-SC View Post
Ha's right--why else would we be here? For the biscuits and gravy?
My advice is a side of bacon with that.
__________________
Westernskies is offline   Reply With Quote
Old 09-16-2009, 04:26 PM   #17
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,372
Biscuits and gravy on the one hand, Wednesday weigh-ins on the other. Where else can you get that kind of debate?
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 09-16-2009, 04:46 PM   #18
Full time employment: Posting here.
 
Join Date: Oct 2006
Posts: 898
Quote:
Originally Posted by Sarah in SC View Post
But I like to troll for advice, if not legal, then at least travel, leisure, investment, or other activities. Ha's right--why else would we be here? For the biscuits and gravy?

I kinda liked youbet's answer, though. That pretty much sums it up.
Sorry if my post might have implied that there was something wrong with trolling for advice. I'm pretty sure people aren't here just for biscuits, gravy, ham or bacon or for seeking advice. And I'm pretty sure some of us are here because they also like to occasionally hear themselves post (including me sometimes) -- not that there's anything wrong with that either.
__________________
Someday this war's gonna end . . .
ChrisC is offline   Reply With Quote
Old 09-16-2009, 07:20 PM   #19
Recycles dryer sheets
 
Join Date: Jun 2008
Posts: 59
$E
__________________
huskerblue is offline   Reply With Quote
Old 09-16-2009, 08:20 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
I for one was curious as to the answer. Personallly, I am inclined to believe the lawyers on the forum, despite (or maybe because of) their disclaimer.
__________________

__________________
clifp is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Logistics of paying off balloon mortgage, then selling house 1-2 months later RunningBum FIRE and Money 9 05-29-2008 12:04 AM
House Of Rep looks at Mortgage Company CEOs chinaco FIRE and Money 2 03-09-2008 06:37 AM
Absentee house owner? CaptCurmudgeon Life after FIRE 9 11-13-2006 09:34 PM
Rivers, kayaking, fishing, nature- my sole criteria oldcrowcall Life after FIRE 5 06-14-2006 04:50 PM
Upside down?! Arif Life after FIRE 19 12-07-2005 12:40 PM

 

 
All times are GMT -6. The time now is 09:58 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.