jonairten asked:
Real estate debt as in a mortgage on a house that isn’t yet paid off. Does the bank just take the house? Or do the children have to pay off that debt?
PLEASE leave a link to an official website showing the answer if possible. Thanks much!
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6 users responded in this post
no whowver inherits the house is responsible but if he had home owners ins the death would pay the loan off and the inheritor would be free of debt..
The bank will collect the remaining debt from the estate of the person who died.
They will take the house and any other valuables left.
Children can not be held responsible for anything, you have rights.
Someone owes someone pays……..if your dad has life insurance it will help………mortgage insurance will help, but someone owes someone the debt…………just that simple….so who’s next in line……..good luck……..pray for dad
Basically, the mortgage company has a lien on the property, meaning that they will get paid off no matter who owns the property. That is, if title transfers to the children as stipulated in a will or living trust, then the children owe the money to the bank that is owed on the property.
In this case, the children have to negotiate some kind of payoff with the bank. I don’t know if they can just take over payments, since the bank never approved them for the loan. But, I’m sure they would be amenable to working something out (if the children lost the home because the bankers were jerks, that would make for some pretty bad publicity for the bank).
One option would be an estate sale, where the children sell the property on the open market to get the money to pay off the mortgage. But, the mortgage doesn’t just fade away when the father dies. Someone has to pay it back somehow.
The last resort would be a deed in lieu of foreclosure. This is where the bank just comes in and takes the deed to the property. This would probably be the best thing for the heirs to do if the father were upside down (owed more than it’s worth). Then the children owe nothing. If the father is dead, the survivors are not punished for his error in judgment while alive.
If you father has passed, and there was no will, the court will decide his estate. If he left a will it will be abided by, but most likely the property will have to be sold. What is important is to get the right to handle the property right away, so that you can get it listed for sale. The mortgage will need to be paid, hopefully he had some insurance to help you out with that. If not, then you kids most likely will have to pay for it. Or you could contact the lender and see if they would be willing to take deed in lieu of foreclosure. The down side to that is, if there is any equity in the property, you kids won’t get it.
Children can not be held responsible for your father’s debt.
Here’s the website u can read
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