Death of Mother-in-law

[dyoder]

D. Yoder alabama

My mother in law died in a fire at her house. She didn't have anything in the way of valuables.

After thinking everything is done and the bank was just going to take back the house since everything is there but the garage, the insurance company informed my wife today that they will be mailing us a check for the repairs and we needed to send it to the bank so they could sign off on it and send it back to us so we could make the repairs on the house.

Questions:

1. Even though the bank was going to forclose on the house and we never stated we wanted anything to do with the property, why are we even involved in this process?

2. If we do end up making the repairs to the house, are we responsible for any back payments (she was nearly 6m) behind on house payments or do we open ourselves up to any other legal action against us from the bank?

3. If we do repair and sell the property for more then what is owed, do we get to keep the extra money or would anything go towards the former mortgage that she was behind on?

We just assumed the bank would repair/demolish and rebuild the property and sell it.

[Some Random Guy]

We just assumed the bank would repair/demolish and rebuild the property and sell it.

Never assume. Banks like to lend and receive money. They don't like to manage personal residences or dealer with burned down homes. Is a big hassle that they don't want - as you realize since you don't want the job of doing it yourself.

If you don't want the home, then you have to actually do something rather than wait for the bank.

First, has probate been opened on her estate? Yes, she has a home as an asset and something needs to be done with it. Is there a will? Who are the heirs? Do any of them want the house? What is the equity in the home (value of the rebuilt property including land minus the outstanding bank balance)? Once you answer those questions, you should be able to figure out if as executor you should be talking to the bank to have them foreclose or whether the house will be repaired by your MIL's estate or by the heirs.