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What if I can't pay the mortgage on a home my parents left me?

Dear Clients and Friends

If you inherit a mortgaged home, you're not obligated to pay it. When inheritors of mortgaged homes can't pay those mortgages, they have a few options.

For one, inheritors can just sell the home and pay the lender from the sale proceeds. Lenders can't pursue mortgaged home inheritors for payments, though they can foreclose to protect their interests. Mortgage lenders don't usually like to foreclose unless they have no other choice. When borrowers die, lenders expect borrower estate to pay off their mortgages or make payments until the mortgaged properties are passed to inheritors. Though specific exceptions for inheriting family members exist, mortgage lenders can also foreclose their deceased borrowers' homes to satisfy their loans. However, someone inheriting a mortgaged home can also just refuse that home and let the lender foreclose on it. Deceased persons' estate executors and/or successor trustees are expected to work lenders to resolve any debts, including mortgages. Generally, inheritors are expected to work with the home's lender to settle its mortgage. Because foreclosures are so expensive for lenders, they might be willing to give the inheritors time to sell and even forgo payments for a time. Refusing responsibility on an inherited mortgage does not affect an inheritor's personal credit history. Under certain circumstances, relatives are allowed to assume a deceased borrower's mortgage.

Checking with us whenever a home, mortgaged or not, is being inherited is invited along with our related services in dealing with the general administration of dealing with a trust estate after death, any needed probate proceeding and/or a dispute resolution relating to an estate matter. HAVE A GREAT HOLIDAY SEASON! Best, Ron

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