If we don't accept the offer and let the bank have the house, $73,000 mtg. will I be free and clear?

If a bank forecloses on a property and obtains less than what is owed for the property at a foreclosure sale then the bank may pursue an action against the mortgagor for the balance owed under the mortgage agreement. If the mortgagor is deceased, then the bank can pursue action against the estate. Whether the bank will actually decide to pursue the amount remaining unpaid, if any, depends on the amount left unpaid and the policy of the bank. As long as you and the estate are kept separate, any action against the estate should not affect you individually, but the bank might try to name you individually in a suit, and even if it does not do so, it is possible that there might be a mistake made by a credit reporting company that confuses you as executrix with you individually. This should not happen, but it might, so while your credit should not be affected by an action against the estate, there is a chance it might affect your credit.

It depends on what happens. You should contact the bank now to discuss the situation. Unless the bank will agree to take less than $73,000 and waive its rights to a deficiency judgment, you need to set a minimum bid of $73,000. You could also approach the bank about a short sale, subject to probate court approval. Your personal credit should not be affected if the debt is not in your name.

You are acting solely in your capacity as executor. If you have no ownership of the property and did not sign or cosign the promissory note, then you have no personal liability and foreclosure will have no effect on your credit score.