QUESTION
Does my mother in law's estate owe $33000 on the mortgage if she is on the deed?
Asked on May 20th, 2013 on Estate Planning - Michigan
More details to this question:
My mother in law gave my husband’s brother over $50,000 to build the house. The deed has her as a one third owner. In her will she instructed the brother to buy out her share and divide between the brothers. She is on the deed but not on the mortgage and my brother in law now claims she (her estate) owes $33,000 on this mortgage.
11 ANSWERS
If she did not sign the promissory note in conjunction with getting the mortgage, her estate is not liable for the debt. But, the debt apparently encumbers the house. You need a lawyer to look at the deeds and will to sort this out.
Answered on May 24th, 2013 at 12:21 AM
If her name is on the deed but not the mortgage, her estate should have no liability for the mortgage. However, if the house was used as collateral for the mortgage, the estate?s interest may be tied up by any action taken by a bank or mortgage company to ensure repayment of the loan. The terms of the will sound confusing and you would be wise to talk to an attorney about how to settle this matter.
Answered on May 22nd, 2013 at 8:32 PM
Thomas Edward Gates
If she is not on the mortgage, she owes nothing to the loan. The bank cannot recall the loan because of a death; hence, payments toward the loan may continued per the original loan terms. Because she is listed in the deed, she may transfer her 1/3 to whom ever she desires.
Answered on May 22nd, 2013 at 8:29 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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Something goofy has happened. The lender would insist on all owners being parties to the mortgage. My guess is that mother-in-law's deed ownership came after the mortgage and is therefore subject to it. So, no, she doesn't owe the $33,000 on the mortgage; but her interest in the property would be subject to foreclosure if the mortgage isn't paid, and the other owners might be able to compel some contribution from her for the mortgage. This kind of question can only be answered by looking at the documents involved.
Answered on May 22nd, 2013 at 7:55 PM
Bankruptcy Attorney serving Henderson, NV
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Jeffrey A. Cogan Chartered, a PLLC
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No. Since she did not sign the mortgage, she or her estate is not liable.
Answered on May 22nd, 2013 at 11:41 AM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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There are different ways of looking at this, but whatever ownership interest ANYONE has in this property is subject to the mortgage. So the estate would own 1/3 of the NET value of the house. That does not mean that the estate would owe on the mortgage or be obligated to pay anything towards it. You have a complex situation, however, and it probably calls for legal advice for everyone concerned.
Answered on May 22nd, 2013 at 10:27 AM
2 Awards
Get to an attorney. It is impossible to tell who owes what without seeing the documents. That said, it is very unlikely she will owe anything on the mortgage if the facts are what you say (a loan in exchange for an interest in the property). You will definitely need an attorney to help sort this out.
Answered on May 22nd, 2013 at 10:27 AM
Sanford M. Martin
If your mother-in-law is not included in the mortgage, her estate does not owe on the mortgage; however, the holder of the mortgage can demand payment of the mortgage. Whoever is on the mortgage owes the mortgage. The personal representative or executor should resolve the issue of liability and distribute whatever remains as owned by your mother-in-law because the holder of the mortgage can foreclose ownership of the property if the mortgage is not paid according to its terms. Contact the holder of the mortgage to obtain information regarding the mortgage. It is best to avoid probate court if possible but depending on her estate and last will or trust, it may be necessary for a probate court to make those decisions regarding the administration of the estate.
Answered on May 22nd, 2013 at 10:26 AM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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I'm not so sure about paying the mortgage, but it may be his way of determining value. If the house is worth $400,000 and there is a $100,000 mortgage on it, the equity is $300,000 and your brother-in-law has to pay $100,000 to his brothers. $33,000 could be looked at as the estate's share. Regardless, the estate will have paid for its share of the mortgage if the total is deducted from the value of the property.
Answered on May 22nd, 2013 at 10:25 AM
Business Law Attorney serving Livonia, MI
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Gerald A. Bagazinski
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Did she sign the promissory note? As a practical matter, the house may be upside down. So if there is no equity, there may be no recovery. Contact an attorney.
Answered on May 22nd, 2013 at 10:24 AM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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There's information that you didn't specify. Who borrowed the money secured by the mortgage (or deed of trust)? The lien created by the deed of trust (or mortgage) is secured by the house and land it's on. The loan which is secured by the mortgage needs to be paid or the lienholder can foreclose on the home regardless of who is "on the deed."
Answered on May 22nd, 2013 at 10:24 AM