haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
What Happens When The Sole Owner Of A House With An Upside Down Mortgage Dies?
Ha
Ha
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 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.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?
God, everything I say isn't necessarily my personal situation.
I do not believe there is any jurisdiction in the United States that would allow a foreclosure because of the death the owner.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.
I do not believe there is any jurisdiction in the United States that would allow a foreclosure because of the death the owner.
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.
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.
Ha's right--why else would we be here? For the biscuits and gravy?
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.
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? .
BTW hono, I am aware of a number of standard mortgage forms which provide that if the borrower or mortgagor dies it is a default on the mortgage and the lender can foreclose. I am not aware of state laws barring this provision, though some states might have such a law and maybe some state's probate laws could slow it down.
The lender is upside down, why would the LENDER try to sell the house when there isn’t anything in it for the LENDER? I can think of "way more" (not a legal term) reasons for an heir to want to continue to make prompt payments on an inherited property than for a lender to allow a short sale or force a foreclosure.
I did go to law school but never practiced but I would have to ask you if you think everything in a contract is enforceable? I would also NOT advise a personal representative to default on the mortgage payments. What if the property doubles in value before the probate is complete. Imagine the liability to the heirs.
Marty, when you think about this stuff I suggest reading up on the concept of enforceability.
[FONT=Tms Rmn,Times New Roman]Most states have passed laws that say that a death does NOT trigger the "due-on-sale" clause of the mortgage. You just keep paying. You are not really assuming the mortgage since you didn't fill out any paperwork. You are taking the property "subject to" the mortgage.[/FONT]
There are situations where due-on-sale provisions are legally not enforceable (legal loopholes):
This can be found in the US Code, Title 12 (Banks and Banking), Chapter 13 (National Housing Act), Section § 1701j–3. Preemption of due-on-sale prohibitions. Mainly subsection D.
Some examples are transfers to relatives upon death, transfer to spouse/children in general, or certain family trusts
[FONT=Tms Rmn,Times New Roman] [/FONT]
[FONT=Helv,Arial][FONT=Helv,Arial]http://www.real-estate-online.com/articles/art-071.html[/FONT][/FONT]
[FONT=Tms Rmn,Times New Roman] [/FONT]
FDIC Law, Regulations, Related Acts - Miscellaneous Statutes and Regulations
If someone who held their selves out as a practicing attorney told me I’d "likely" go to jail, I’d be making a "dating" plan! I’m afraid I’d "likely" be popular. You remember I was a model.
The lender is upside down, why would the LENDER try to sell the house when there isn’t anything in it for the LENDER? I can think of "way more" (not a legal term) reasons for an heir to want to continue to make prompt payments on an inherited property than for a lender to allow a short sale or force a foreclosure.
I did go to law school but never practiced but I would have to ask you if you think everything in a contract is enforceable? I would also NOT advise a personal representative to default on the mortgage payments. What if the property doubles in value before the probate is complete. Imagine the liability to the heirs.
Marty, when you think about this stuff I suggest reading up on the concept of enforceability.
[FONT=Tms Rmn,Times New Roman]Most states have passed laws that say that a death does NOT trigger the "due-on-sale" clause of the mortgage. You just keep paying. You are not really assuming the mortgage since you didn't fill out any paperwork. You are taking the property "subject to" the mortgage.[/FONT]
There are situations where due-on-sale provisions are legally not enforceable (legal loopholes):
This can be found in the US Code, Title 12 (Banks and Banking), Chapter 13 (National Housing Act), Section § 1701j–3. Preemption of due-on-sale prohibitions. Mainly subsection D.
Some examples are transfers to relatives upon death, transfer to spouse/children in general, or certain family trusts
[FONT=Tms Rmn,Times New Roman] [/FONT]
[FONT=Helv,Arial][FONT=Helv,Arial]http://www.real-estate-online.com/articles/art-071.html[/FONT][/FONT]
[FONT=Tms Rmn,Times New Roman] [/FONT]
FDIC Law, Regulations, Related Acts - Miscellaneous Statutes and Regulations
No, not at all. I did think your answer was very flip and could see where the OP would be startled to think it was likely that the property would be forced into foreclosure. Then there was talk of a tax sale, I figure a IRS lien and the threat of eminent domain would come up shortly. I just pointed out some facts that I hoped would relieve their apprehension. Can't we just git back to the comfort of biscuits n gravy before Grandpa's farm is taken away. Plus, you know it makes me crazy when people only see real estate in the most negative light.Are you mad at me or something?