Assuming a deceased parent's mortgage

[garyishler]

Pennsylvania

My grandmother passed away in November of 2013. She left everything to my mother (of her three children). Her home was left with a mortgage of approximately $59,000 to OCWEN of Florida. She left with a great deal of medical expenses, and received help financially from our government with her mortgage. I'm trying to give any details which may affect the outcome here; my apologies if I'm being too thorough. Our lawyer informed my mother (executor of the will), in the presence of both my brother and uncle, that she would not be able to assume the mortgage and that we would have to sell the home in order to cover my grandmother's expenses to OCWEN, the lawyer, and her outstanding bills. After showing the home to several prospective buyers, the latest has informed us that his understanding is my mother (or any child) can assume the mortgage and occupy the house, so long as the bank is notified properly. He seems to believe that this can still happen, even after no one has paid on the mortgage in nearly a year. I lightly investigated this, and discovered the Garn-St. Germain Depository Institutions Act of 1982 which seems to confirm his assumption. Is the lawyer just trying to get her chunk of the profit from the sale of the home?

I'm inquiring as to whether there are any possible facets of this situation that would prevent my mother from paying my grandmothers back-mortgage, paying up on the remainder of her home's bills, and occupying the house. ANY info is SO MUCH appreciated, as this home is where we grew up, and we have great personal investment into it.

Thank you in advance.

 

[Zigner]

Your grandmother's estate assets are needed to pay the outstanding debts.

 

[garyishler]

Your grandmother's estate assets are needed to pay the outstanding debts.

How is it determined that her debts are significant or insignificant enough to require sale of the estate or allow mortgage-assumption?

Appreciate your quick reply.

 

[Zigner]

How is it determined that her debts are significant or insignificant enough to require sale of the estate or allow mortgage-assumption?

Appreciate your quick reply.

Can the debts of the estate be paid without selling the house?

 

[garyishler]

Can the debts of the estate be paid without selling the house?

Including medical and legal?

From what I understand, only percentages of what is received in the sale of the home will be offered to her outstanding debts. "X" percent to the mortgage, medical, legal, etc and then finally a small sum to the executor.

 

[LdiJ]

Pennsylvania

My grandmother passed away in November of 2013. She left everything to my mother (of her three children). Her home was left with a mortgage of approximately $59,000 to OCWEN of Florida. She left with a great deal of medical expenses, and received help financially from our government with her mortgage. I'm trying to give any details which may affect the outcome here; my apologies if I'm being too thorough. Our lawyer informed my mother (executor of the will), in the presence of both my brother and uncle, that she would not be able to assume the mortgage and that we would have to sell the home in order to cover my grandmother's expenses to OCWEN, the lawyer, and her outstanding bills. After showing the home to several prospective buyers, the latest has informed us that his understanding is my mother (or any child) can assume the mortgage and occupy the house, so long as the bank is notified properly. He seems to believe that this can still happen, even after no one has paid on the mortgage in nearly a year. I lightly investigated this, and discovered the Garn-St. Germain Depository Institutions Act of 1982 which seems to confirm his assumption. Is the lawyer just trying to get her chunk of the profit from the sale of the home?

I'm inquiring as to whether there are any possible facets of this situation that would prevent my mother from paying my grandmothers back-mortgage, paying up on the remainder of her home's bills, and occupying the house. ANY info is SO MUCH appreciated, as this home is where we grew up, and we have great personal investment into it.

Thank you in advance.

It necessary for the estate of a deceased person to cover any outstanding debts of the deceased person, before distributing any assets to the heirs. I agree that your mother could simply keep paying the mortgage and keep the house if there were no other debts to be paid. However, since there are debts to be paid, and an attorney to be paid, if the house is the only asset of the estate then yes, the house has to be sold to cover the debts.

 

[Zigner]

If all of the bills of the estate can be paid (excluding the mortgage) without selling the house, and if your mom (assuming she inherits the house) is going to live in the house, then the house doesn't have to be sold - your mom can simply notify the lender of the situation.

ETA: Yeah, what LdiJ said

 

[latigo]

Your mother needs to better understand and adhere to the priorities and her solemn duties and responsibilities associated with her position as the court appointed personal representative of the decedent's estate. The least of which is her own personal desires.

If she is going to be influenced by the "advice" from people from off of the street rather than that of the attorney for the estate, she should step down.

 

[garyishler]

Well that's pretty clear. Thanks everyone.