Q: My mother passed away and left a house with a mortgage. The house has not sold in this market and the value has declined due to foreclosures in the area. The bank is pursuing foreclosure and naming my mother’s heirs as defendants to terminate our interests in the property.
We have few resources and my mother’s estate was exhausted by the cost of repairing and maintaining the property while trying to sell it.
Is it more cost effective to go through foreclosure and add a statement to our credit reports explaining that the mortgage was not ours or should we pursue a deed in lieu of foreclosure?
A: My condolences on your loss.
The key to understanding the foreclosure action by the bank is this: The bank’s action is against the bank’s borrower, your late mother, not you. If your mother was the only borrower on the original loan to the bank, you and your siblings or other heirs should not be personally responsible for the loan. Your mom’s estate is responsible for repaying the mortgage.
If the estate has insufficient funds to pay off the lender, the lender has the ability and right to foreclose on the home. But that foreclosure should not affect your credit history or the credit histories of the other heirs.
The bank shouldn’t have your social security number nor should the bank have any documents from you obligating any of you to repay the loan. In that case, the loss on the loan is taken by the bank and reported against the borrower – your mom.
If you decide to pursue a deed in lieu of foreclosure, you and the other heirs would be relinquishing any right any of you have in the home to the lender. But that documentation should not have anything to do with the original debt taken out by your mother. Once again, the person obligated on the debt was your mother and she bears the loss. In this case, her estate takes the loss on the home.
If title to the home was transferred from the estate to its heirs, the duty to repay the loan fell upon those new owners. However, those new owners shouldn’t have a legal and personal obligation to repay that loan. If the loan goes into default, the lender would foreclose on the home and sell the home to satisfy the debt. The credit history of the current owners of the home should not be affected.
You should make sure that you did not sign any documentation with the lender that may have placed your credit at risk with the lender. If you did not, you and the other heirs shouldn’t have to worry about a negative report on your credit histories.
You and the other heirs shouldn’t be penalized by the current lender when you are placed in a position of owning a property you did not buy and for a loan you did not enter into. While you tried to keep up with the expenses of the home, if you found that it was too much and then couldn’t sell it and failed to make the loan payments, the lender remedy is to foreclose on the property.
For more details, and to make sure you are protected in any dealings with the bank, you may wish to speak to a real estate attorney.
March 13, 2009.
You really should put a few more ads on this page, not enough. Good Lord!
Steve, Thanks for your comments. Notice that some of those so called ads take you to other projects we are working on. And, we have a large site with thousands of pages of original content we have written. The ads allow us to keep our site free. Sorry if you think they are too many.
My brother and i inherited my fathers home with a morgage more than the value of the property so we told my dads attorney that we wanted nothing to do with it, that we wanted to do a quick deed back to the morgage company and wanted to let it go into foreclosure. Now the bank with the morgage is foreclosing but they listed it in the paper and also on court papers with my brothers name and mine. Not our fathers name! Is this legal for them to do? What is our recourse? We are concerned about our credit as this was not our loan. Thank you.
My Aunt passed away before she could change her will her beneficiary passed away before her i was made personal representative of her estate it has a mortgage i can’t pay wich is due by Dec 1st the probate attorney told me not to pay the mortgage 4 months ago that the estate would pay for it so I’m not understanding and im finding the Attorney has not be forthcoming at all im lost nobody is helping me
My mother passed away leaving the home in probate. I am the representative of the estate. She has a mortgage with a mortgage lender and a home equity line of credit with the bank. the mortgage will be paid off soon, leaving the HELOC. Will the bank assume the title. I do not care for the home equity, and would like to get that paid off. What are my options?
I inherited my mothers home in a living will with a trust fund and my brother probated the deed in my name . It was a Fannie mea Fllat rate loan . And the bank escoroll the the taxes and insurance on the house so I was paying 535.00 witch I could handle I got sick in 2011 had to stop working . The loan 2nd loan was taken out in 2004 and my mom passed in 2005 . I was paying the loan every month but I had to file chapter 7 bankruptcy to get a fresh start . In 2013 and in 2014 a car crashed into my house I was getting a store put together I was almost open and I had renter rent when they paid I am a single women not educated . And was taken advantage of buy the contactor .but I lost my income .because we where put out buy the fire Marshall and it took 8 months to fix the house . And the bank would not take the money ok offered when the house went into default . I didn’t know what to do . And they said I couldn’t modify and they kept trying I had no council and I didn’t know who to go to for help so the house went into forclosure and I filed chapter 13 to. Stop the action and the attorney told me to sell the house . But I didn’t want to its all I had left of my parents . Well I was already bipolar depressed . But I developed PTSD. fibromyalgia ,authritis ,anxiety , isolation ,I was afraid to sell my house that is all I new I owed 23,000 . And the only help I could get was modification . So then I had a fir and I was robbed . Tha PA ripped me of didn’t finish the work and I didn’t get the money I incurred while I was out of my house . I was so overwhelmed with issues and no support or help . I file chapter 13 again to stop the action But the attorney went to court and the judge was sick and I guess the action was to close to get another court date witch was not fair to me I never got a day in court . With the will deed the first mortgage Fannie mea loan . So the hous went to action and was sold . I feel something is wrong well one thing is that chapter 7 was dicharged but chapter 13 was dimissed because I think they said I didn’t do both counseling courses and I did . Well I haven’t had income since 2016 . And what happened to my trust fund . And the closing of the house was in April but the deed is not in there name yet . And the probate firm will not answer my calls. My life has been ruined I’m to old to start over . Scared and lost
I’m sorry that you’ve had so much stress in your life. It sounds like the last few years haven’t been fun. Please contact the local bar association and see if someone there can help.
I have called the bar association many times and they don’t help they give me attorneys I can’t afford and the Department of legal services turned me away .im a amotional wreck Because I now there is something wrong . I shouldn’t of had to pay my mother loan but my brother wasn’t doing the probate and they are suppose tones end him a letter to collect for the loan but they didn’t because I was paying the .im still living here in the apartment tharpt was flooded by the contactor and it is rill there I’m probably sick from the mold . They never fixed the floor and the isurance company didn’t answer me about it and cancelled the insurance I’m sure she had motgage insurance but I don’t know with who .because she was terminally ill she had COPD .thank you for you time I just want my house back .
I need to find an attorney in upstate network to go over my paperwork . Because I don’t understand anything I pay all that money and because a car hit my house I loose it . I shouldn’t be liable for that.
The best way to find an attorney is to call your local bar association. If you’re in Ithica or Rochester, each of those cities should have a bar association. If not, call the New York State Bar Association. Once there, ask for the attorney referral service. I’m not sure your issue is an estate issue or a liability issue. But if you explain it, they’ll connect you with someone who should be able to help you. If not, ask for the head of the estate or liability practice.
Ilyce Glink, Publisher
I am in a similar to predicament to the one in the article, and others who have posted comments here. The lack of available information is maddening, and in my opinion shows what a failure our legal system is, as we are expected to pay insane amounts of money for legal representation, with no recourse should the attorneys we hire perform poorly or unethically.
My father died in late 2016. The administrator attempted to circumvent me (the only heir) in favor of my aunt and cousin, who were personal friends of the administrator. Until a magistrate ruled that I could not be ignored in the probate process, I was not even notified of his death- the admin stated that he could not locate me, until the magistrate ruled that he must, and then he magically called me the next day, which was in late 2017. The admin also attempted to “buy me off” with a small amount of money, and included an expiration for his “generous offer”, but sent this to me via an unreadable email (encoded). When I contacted him wondering where the information regarding my father and his estate was, he was rude and disrespectful, and essentially threatened to sue me if I didn’t back off and let him have the estate. Now, I didn’t have much money at the time, so I had to reach out to family for a referral for an attorney. The attorneys I have now have showed minimal interest in assisting me with my case, since they have gotten the bulk of their fees ~$30k. I also had to pay $20k to the crooked admin, though my attorneys originally made it sound like they were going to have their fees paid by the crooked admin, and I wouldn’t need to pay him anything since he basically broke the law.
So, the cash was disbursed in installments, but the home wasn’t appraised (multiple times I was assured that either the admin or my own attorneys would have this done), nor was I informed of anything regarding the home until I was sent a copy of the form which transferred it into my name early this summer (2018). I was never sent any information on the mortgage, just a payment book. The bank will not speak to me about this loan, how it is structured, what a payoff amount is, nothing- unless I blindly sign up to be responsible for it. The home was in terrible shape, has much damage, has high taxes, and all homes in the area are priced ridiculously low. I now know that the home is worth *maybe* what the remaining mortgage is. I have already paid a few thousand dollars in taxes, a mortgage payment, and past due utilities (which were hidden from me by the admin). I have not signed onto the mortgage.
Considering how unreliable my attorneys are (they do not answer my questions, only try to spin my questions into something else, then “answer” by offering to take more money from me to help fix and sell the house through their friends, etc.) I am at a loss as to how to proceed. I have already lost ~$50k to scumbag attorneys, and do not have the money to pay off the balance, then fix up the home, then wait to sell the home. Houses there aren’t selling well at all, or for much money. The attorneys in that area seem to all be friends with each other, and friends with all the realtors, judges, etc.
I really have no idea how to dispossess this house, all I have is a copied form that says I am registered as the owner with the county. I *need* to drop this property with no liability to myself, because I just moved out of my rental halfway across the country to discover this ruined house… and am currently staying with my elderly mother in the adjoining state, which I cannot continue to do for long. The estate matter is not even entirely closed, the admin hasn’t bothered to send us an accounting of the estate, and my attorneys refuse to help close the matter, as they are aligned with the interests of the admin- they get to keep billing me every time they read an email, then reply with nonsense that doesn’t address my queries. The admin is taking this time to hide fraud or cooking up some other scheme to steal back the money they were forced to disburse, I believe, and is doing so with the blessing of the attorneys I hired… they are upset that I won’t pay all of my inheritance to them to fix up a house that will never sell for what I pay into it, or will owe to the bank.
What the hell do I do?
I have written to you before about the house that was left to me and my brother did not do his exectey duty he did not send out death certificates. And I did get any money to pay off her loan I’m sure since she was terminally ill she would have mortgage insurance well I became disabled and I didn’t get my disability until after the house was sold at a referee action and the bankruptcy from my mother loan was on my credit report and I didn’t take out the loan I tried to get renters insurance and the insurance wouldn’t give it to me because of my credit .so I lost my mother my house because my brother the executer didn’t send out death certificates but I sent one to the creditor and I payed the loan not the estate and my brother didn’t help me and I had no attorney I could not afford one and I ended up stay in the apartment upstairs in the house and rented it and it caught on fire and I don’t know what to do I would like an attorney to get me through this I lost everything .and I think the creditor is reponsable and how they got my social security number I don’t know and my mothers social security number was on my credit report I don’t know why .
I’m sorry about your run of bad luck. You can try to get an appointment with your local Legal Aid clinic. Unfortunately, I don’t understand enough about what happened to you to be able to give you more specific advice. Good luck,
Ilyce Glink, Publisher
I written to you before and I did some research and I found out that I still can’t get help .and my brother waited for 8 yrs before he probated he was the co signed for the loan and since I couldn’t refinance he was waived and released by all liability and the creditor came after me for the balance I was paying a escorow account .they wouldn’t let me modify. And I had no where to go . That was not my mother’s last wishes .I read in her paperwork that the estate would pay the balance .But my brother never looked to see if there was any money out there to pay it.the bank ruined my credit and I wasunable to get renters insurance and the apartment upstairs I rented out caught on fire and I lost everything . And I can’t recoup anything or put in a claim.its bad enough I lost my mother and took care of her for 20 yrs .and then paid for a loan I didn’t have to .and list 9 yrs later then it catches on fire and all my memories of the house and pics are gone .this has caused mental illness and I need medication for my depression and PTSD , agoraphobia. Bipolar depression and major anxiety.someone should be accountable for ok r the way I feel everyday .and my disability is not enough to afford anything half way decent .
my sister and my mother got a loan for a mortage medication, my mom passed away wtth no will. my sister and my mom signed for the loan. my mom has 3 children my brother and I knew nothing about the loan. the house is in probae. will they take my brother’s and I portion of the house to pay the loan
Thank you for your advice .that is kind of you .I think that it is horrible that people with power and more knowledge than myself prey on people that don’t know anything about what went on before my mother passed .The thing is my mothe took out a home equity loan it was a second motgage and she put 20 % down and paid 16 months of the loan and passed witch I think was a wrongful death she had COPD and would have panic attacks and I would always be there to calm her down until the met would get there and she would go into the icu But this time the Doctor went from the icu to a nursing home for rehab so she could walk and not Bree a burden to me and she never complained and had shingles on her face and eye I took care or her for almost 20 years and I watch her depreciated and she told me she didn’t like the overnight nurse and I was surprised to here that she liked everyone and they her .so I had a hard time leaving her that day .and the next morning I got the call from the nursing home while getting ready for work at 6am to her she died of a heart attack.and I know just what happened she panicked and couldn’t breath and they ignored her buzzer or the flashing light.and she did that way.she had the will to live .and she had made out her last will and testament and she devised and bequeathed the estate to me under the will and my brother was named executor of the estate.and eft no previsions for the other three children..I live in the house fir 50 years that my grandfather built . And I was left the house and she rented out the apartment.and I was sent the payment book so I thought I was supposed to pay for it and she had homeowners insurance and whole life insurance but I didn’t know what was supposed to be done and I wasn’t told that the estate payed for the mortgage and I was paying and I was paying the taxes .and then the lender sent me a letter and they escrow the taxes and insurance in with the loan plus interest.and that was a little much for me but I did it .for 9 years until a car hit the house and I became disabled before the car hit the house that’s when I found out that my brother co-signed the promissory note the Fannie Mae Freddie Mac uniform 3033 mortgage and the Ryder and the hole 8 years he didn’t do anything.she had no assets but the house and property and he finally did something but I know he didn’t go to court with the will . And he let me pay all those years and never took over and did his fiduciary duty.and I paid on a lien .but I read from the title insurance agency that she had with the first mortgage that there was no lien nor forclosure on the house and the check was made out to the attorney s firm .that doesn’t seam right to me .and he never told the homeowners insurance company that she passed but why would he have to when they where at the funeral.and he got her face value of her life insurance but she paid on it for for 15 years what happened to the death benefits.that would of paid off the mortgage or the homeowners insurance could of paid it also I was paying the premiums on the insurance and sfter the car hit the house .i was put on a deed I was not able to refinance for .and they where trying to put me on the mortgage but that didn’t happen .and I lost the rental income and I was waiting on disability and the creditodrs put the house in default I think thirty days after my last payment .and then I didn’t know what to do while in a motel after sitting in the house with a makeshift wall until I found a contractor that didn’t finish the work he was paid for like the foundation.and the house went into forclosure and I was summonsed to court and my brother was also but he did nothing because. He had distributed the assets and payed all taxes (I did) and paid all depts (I did) andthe estate was settled and closed .But the creditors still went coward without the foreclosure and I had no attorney and I didn’t know what answer to the courts means .and the meeting of the creditors.means so. Filed chapter 13 to stop the auction I didn’t know it was for a payment plan.witch I didn’t get a chance to get on my feet and I didn’t rent out the apartment.i had know income but I got from my loss .And Statefarm canceled the insurance and I had to get insurance and I got farmer not owning the house .i didn’t know that you couldn’t get homeowners insurance if you didn’t own the house but they new there was a mortgage and ther was a small kitchen fire and I was screwed by the PA And his adjusters and then the house wa sold at a referee auction and my daughter bought half of the house so I move up in the apartment upstairs that was flooded by the contractor.and was not able to get renters insurance because of the bankruptcy from my mothers loan .and that caught on fire I Lmost lost my life and my dogs and I lost everything.was Putin a hotel got my dudpsability 758 a mont went into a motel and had to get rid of my 4 dogs and was evicted from her because a tenant didn’t like me and now I can’t find a place to live that I can afford.and I was robbed by friends when I was in the apartment.and someone stole my money I got for rent for another apartment and it is gone .because there are no locks on the windows and she didn’t chage the doorknob when someone moves out .there must be someone that can help me .i am mentally not well I can’t handle anymore and I have no one .I know that isn’t why my mother made out a will for me to be sick and homeless.
I guess I’m not going to get any help.my brother sighed the Fannie Mae Freddie Mac uniform instrument 3933 and the promissory and the Ryder i was told I had to pay the lien .witch I did and I payed on the loan for 9 years befor my brother did anything and I lost my tenant due to the house being damaged by a car and my brother was the executor of the will.he didn’t do anti to help me I was bequeathed and devised under the will .and he didn’t tell my mothers homeowners insurance that she passed but they where at the funeral.i think they new and I was paying the price premiums in a escrow account and the tenant money was suppose to go into a estate account and pay the mortgage and my brother didn’t do that .i was screwed by every tenant I had .and lost a lot of money.and the judge didn’t know the circumstances . I lost the house to forclosure and it ruined my credit and I can’t afford to live anywhere else the last thing that happened I was renting the apartment upstairs and it was flooded by the contractor but the insurance wouldn’t pay and the contractor wouldn’t fix it and I had a lease and I was not able to get renters insurance and I’m on disability and I’m getting under poverty level and the apartment had a electrical fire and I am in.a motel I ad to get rid of my 4 dogs I have 2 left I wouldn’t be here if I didn’t have them and I have been evicted from a motel because a tenant doesn’t like me I have to b out and I can’t afford a place to live and my credit is ruined from the bankruptcy I had to do to try and save the house I inherited and payed 9 years on . I wish someone would help me or just look at the paperwork the loan office apsaid there was no merit.
I know that the story that I’m telling you sound like a mess and it was a mess .But it should have been cut and dry if my mother made out her last will and testament.that why you make out a will .But she died from the negligence of the nursing home where she was in there for rehabilitation to walk and had COPD and just came out of the ICU .a because she would have panic attacks I took care of her for almost 20 years and she didn’t die under my watch and I’m not a certified nurse. And that is what happened she had a panic attack and because she couldn’t breathe she had a heart attack because they didn’t go to her when she had the light blinking or the buzzer going off.So I never got to talk to her about her finances.But I do know my brother co-signed the promissory note and the mortgage and the Ryder and he got out of all liability.and I became disabled and homeless because I’m not getting enough money from disability to rent a apartment.And the creditors put the bankruptcy on my credit report and it hard to rent with that on your credit .ive been through so much trauma I can’t fight anymore it’s going to kill me and I’m not educated enough to know what I was doing the only way I found it what I do know is after the house was hit by the car and the creditors put the house in default.and I was able to see all the paperwork that was behind the loan.I didn’t know that my brother co sighed for the mortgage.But I’m sure the bank new it was a Fannie Mae Freddie Mac uniform instrument and Ryder .I just want to thank you for the advice you have given me but the bar association in Goshen NY gives you attorneys that you need money for and I didn’t get on dime from my mothers inheritance or her life insurance policy .i just don’t understand who would be the beneficiary of the will .