QUESTION
Can the mortgage company legally ask the deed holders remaining to pay?
Asked on Jul 21st, 2013 on Foreclosures - California
More details to this question:
My mother in law in on deed, but not the mortgage. Brother in law was on the deed and has mortgage in his name only. Brother in law just passed away. I understand it will foreclose because wife and mother in law cannot pay, but legally are the remaining deed holders responsible for the loan? Are the deed holders responsible to satisfy any encumbrances on the property?
4 ANSWERS
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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It depends on the law of the state where the property is located. If in Arizona - no.
Answered on Jul 26th, 2013 at 1:16 AM
Only people who signed the promissory note and mortgage are responsible to pay the loan. On the facts you have stated, only the estate of the deceased brother in law would be responsible if the mortgage company were to foreclose and recover less than the amount owed. You could try to sell the house through the probate proceeding and ask the mortgage company to delay foreclosing.
Answered on Jul 26th, 2013 at 1:16 AM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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It is a fascinating question. If your MIL is not liable under the mortgage, her interest cannot be foreclosed. Once the BIL's interest is foreclosed, she will be a tenant in common with the mortgage company. What a mess.
Answered on Jul 26th, 2013 at 1:16 AM
Assuming that the mortgage was the original purchase money loan, then the bank's remedy is limited to foreclosure and sale of the house. Nobody, whether they signed the promissory note or are on the deed, is liable for any deficiency (difference between sale price and loan balance). You don't say what the other encumbrances are, but if the house does not sell for a price high enough to pay them off, there may be personal liability for the deficiency.
Answered on Jul 26th, 2013 at 1:15 AM