What if I no longer want a house that was left to me?

[angd]

What is the name of your state (only U.S. law)? Michigan

I inherited my Dad's house when he died 3 years ago and fixed up the house to sell (it was a disaster) but now the mortgage is upside down. There is no way I can sell it for the mortgage value, let alone the extra money I put into it. I have been renting it out, but I'm barely breaking even on the expenses. It is still in the name of the Estate, not mine. Can I just walk away without any repercussions on me personally? Is there a way to officially refuse my inheritance (3 years later)?

 

[nextwife]

What is the name of your state (only U.S. law)? Michigan

I inherited my Dad's house when he died 3 years ago and fixed up the house to sell (it was a disaster) but now the mortgage is upside down. There is no way I can sell it for the mortgage value, let alone the extra money I put into it. I have been renting it out, but I'm barely breaking even on the expenses. It is still in the name of the Estate, not mine. Can I just walk away without any repercussions on me personally? Is there a way to officially refuse my inheritance (3 years later)?

The personal rep was negligent by simply leaving the probate open and failing to transfer the property. Does the estate have other assets? Have those been distributed without this debt being dealt with?

Contact the lender and see if they will accept a deed from the estate. Is the PR of the estate still performing their duties?

 

[angd]

There are no other assets. What little there was in a bank account was used to pay mortgage payments.

Another family member is the PR and did not want the property in her name, so she just kept the estate open until we sold the house. We did not intend on keeping it. We just had to fix it up and then the real estate market crashed. The market value of the house at the time we inherited it was well above the mortgage value. It has dropped by 60% at least.

 

[nextwife]

There are no other assets. What little there was in a bank account was used to pay mortgage payments.

Another family member is the PR and did not want the property in her name, so she just kept the estate open until we sold the house. We did not intend on keeping it. We just had to fix it up and then the real estate market crashed. The market value of the house at the time we inherited it was well above the mortgage value. It has dropped by 60% at least.

The lender should be informed that the estate is insolvent and will agree to deed the property and will be ceasing management and utilities as of X date Say, a month out so they can get a title report and deed docs ready)

 

[curb1]

Contact the lender and then get back to us.

 

[xylene]

What is the name of your state (only U.S. law)? Michigan

I inherited my Dad's house when he died 3 years ago and fixed up the house to sell (it was a disaster) but now the mortgage is upside down. There is no way I can sell it for the mortgage value, let alone the extra money I put into it. I have been renting it out, but I'm barely breaking even on the expenses. It is still in the name of the Estate, not mine. Can I just walk away without any repercussions on me personally? Is there a way to officially refuse my inheritance (3 years later)?

You are in an awful mess and you need to be talking to a lawyer in the shortest order.

You need to consider your liabilities to your tenants, if there is a lease. If not you need to be moving forward with notices, etc...

You need to move very quickly.

Will the shoddy paperwork on the estate save your personal credit? A definite maybe. Of course you should also ask yourself what would have gone down if the house had been flipped and whose money that would be...

 

[angd]

There is no tenant right now. That's why we are considering getting rid of it now. Obviously we have to keep it if we get a tenant, which is ok because we would break even, unless major repairs are needed.

We have an Estate bank account which everything goes through and we were under the impression that the proceeds of the sale would go into the Estate account and then could be distributed to the family. Is this wrong?

 

[anteater]

We have an Estate bank account which everything goes through and we were under the impression that the proceeds of the sale would go into the Estate account and then could be distributed to the family. Is this wrong?

Huh? What proceeds? Do you think that the mortgage is just going to go poof and disappear?

...but now the mortgage is upside down.

 

[angd]

Yeah, I know there will not be any proceeds now. I was responding the question:

"Of course you should also ask yourself what would have gone down if the house had been flipped and whose money that would be..."

We do net $75/mo. with a tenant. The rental market in MI is doing great.

 

[curb1]

angd,
Have taxes been filed/paid by the estate to this point?

 

[angd]

Taxes were filed for the year of his death, but not since then. There was no income prior to 2009, which was the first year we rented it out. Taxes will be filed for 2009. Income does not exceed overall expenses, but that probably doesn't matter.

So, the lender says we can apply for a deed in lieu of foreclosure or just foreclose. Either way they said it should not affect our credit at all since it's still in the name of the Estate.

How do we do that? Just shut off utilities, cancel insurance and stop paying the mortgage?

 

[xylene]

You can't just 'hang it up'

You need to deal with the problem - serious problem - that exists because your fathers estate was handled so badly.

3 years of limbo is not good.

Let's put it this way, would you be liable if the estate HAD been handled properly? (the answer is obvious)

You need to get a lawyer.

The lender does not have any duty to you and the advice they give is probably incorrect or at least partially incomplete.

This isn't a matter of few dozen dollars. This is a home mortgage.

Whenever somebody is telling you that you can walk away from a 5 or 6 figure obligation on a technicality, you really need to run that past someone who is a professional, expert in that area of law, and working for you.

Not a telephone customer service rep from the lender who WILL want the money.

And NO - that isn't the personal representative's job to look out for your interest. Besides which in this case the PR has already proven to be hapless, uninformed and disinterested.