QUESTION
Does my mother obligated to pay my deceased father's home equity loan?
Asked on Jan 25th, 2014 on Estate Planning - Michigan
More details to this question:
My parents have a paid jointly own house, but my father passed away last month with home equity balance of $400,000 and he is only contract signer. Does my mother obligate to pay that home equity loan?
17 ANSWERS
Contracts entered into during the marriage are generally considered community property even if only one spouse signed the contract. You should consult an attorney to review the documents and the facts and advise you.
Answered on Jan 29th, 2014 at 11:11 PM
Usually the payment of the loan is secured against the real property. If she does not pay it, they will take the house.
Answered on Jan 29th, 2014 at 8:32 PM
Thomas Edward Gates
The estate is responsible for the loan. However, when dies without a will in Washington, the property goes to the surviving spouse. Thus, if she wishes to keep the home, she would be responsible to payoff the loan.
Answered on Jan 29th, 2014 at 8:16 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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No, she is not obligated, but the lender will foreclose on the property and take it from her if she doesn't pay.
Answered on Jan 29th, 2014 at 8:13 PM
General Practice Attorney serving Canton, MI
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James F. Malinowski
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When you borrow money as a home equity loan, you pledge your home as security for the loan. Although Dad may have been the only person that signed the loan, Mom would have had to sign the mortgage since she is an owner of the home. If she doesn't pay, the loan will be foreclosed and she will lose he home.
Answered on Jan 29th, 2014 at 7:52 PM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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The Home Equity Loan remains a viable lien on the real estate. The owner of the real estate must continue to pay the loan payments or refinance. If the real property is sold the loan will have to be repaid with sale proceeds. If the loan goes into default the lender can foreclose against the property. If your mother is not the owner of the property then she would not have to repay the loan.
Answered on Jan 29th, 2014 at 7:50 PM
Your father's estate is responsible for paying off the home equity loan. However, if the loan is not repaid, the loan holder has the right to take possession of the property and sell it. So while your mother isn't personally responsible for the loan, it will be in her best interest to make sure it gets paid off if she wants to keep the house.
Answered on Jan 29th, 2014 at 7:47 PM
Corporate & Incorporation Attorney serving Huntersville, NC
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Elliott Law Firm, P.C.
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Mom cannot be forced to repay the loan because she was not a borrower. However if the loan is not paid the lender can foreclose. Dad's passing does not extinguish the lien against the property.
Answered on Jan 29th, 2014 at 7:44 PM
If the home is jointly owned, I do not see why a lender would lend only to your father. You need to double check the paperwork. If somehow she was not part of the loan, then when no monthly payments are made the lender can foreclose on at least half the house. It would then probably move for a partition sale of the property [court orders house sold and proceed divided]. I think it would be best to spend the money to speak with a local real estate attorney.
Answered on Jan 29th, 2014 at 1:55 AM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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Yes if she wants to keep the house out of foreclosure; she can also sell and pay off the loan, and take the net proceeds.
Answered on Jan 29th, 2014 at 1:55 AM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Not if she did not sign. Of course, if payments are not made, your more would lose the house. Buy it is her choice.
Answered on Jan 29th, 2014 at 1:55 AM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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No, she can let them foreclose on the house instead.
Answered on Jan 29th, 2014 at 1:54 AM
3 Awards
The home equity line is secured to the property. Were they joint tenants,. If so either could agree to the loan. Have an attorney review the loan and chain of title to determine if she is liable. Form your facts it appears that she probably is. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.
Answered on Jan 29th, 2014 at 1:40 AM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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More information is needed. It really shouldn't be possible for one owner of real property to be separately liable for a loan secured by the property. Someone needs to review the deed(s) and trust deed relating to the ownership and the loan.
Answered on Jan 29th, 2014 at 1:39 AM
If your mother did not sign a promissory note, she is probably not liable to pay the debt personally. If the house is owned by your father?s estate, however, you may need to deal with the lender through the probate or trust administration. Additionally, if the lender has a mortgage or deed of trust on the home, you will need to deal with the lender to get the mortgage removed.
Answered on Jan 29th, 2014 at 1:39 AM
Admiralty / Maritime Attorney serving Monrovia, CA
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The Law Office of Nathan Wagner
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Your mother has to continue making monthly payments, but she does not have to pay the whole mortgage all at once. If she does not make the monthly payments, the lender can foreclose on the house, just as they could have foreclosed if your father had failed to make the payments.
Answered on Jan 29th, 2014 at 1:38 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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I need to see the paperwork. It depends on the contracts and what she signed, if anything.
Answered on Jan 29th, 2014 at 1:38 AM