Concerning Affidavit of Heirship...

[CrisCo71]

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

Greetings,

I'm in a position to assume a mortgage on a deceased family member's house. The deceased did not leave a Will and I'm completely confused....

There's no one contesting the effort. I've spoken with the mortgage company on multiple occasions and for the most part they've refused to be of much help, but now they've sent me an Assumption Package (which I was being told they wouldn't do until *after* filing a Letter of Testamentary) and I'm stumped on a few points:

1- I will be proceeding with filing an Affidavit of Heirship form. Exactly which, if any, parties are required to be present when the form is notarized?
2- Does each potential heir need to fill out a separate form and have it notarized separately? Can I record the information on behalf of the parties?
3- Is the "Letter of Testamentary" obtained from the county clerk's office after submitting the affidavit?
4- Should I take immediate occupancy? The Death Assumption Package states "You MUST occupy," but does not designate any timeline. This is an EXTREMELY sensitive point because I have a 6-yo son and he would have to transfer schools. My worst fear would be that this became an unstable "squatter" situation where the county would show up with an eviction notice.
5- At what point can I obtain a Quick Claim Deed (or equivalent) and how/where/when do I start that process?

Thanks!!

 

[FlyingRon]

1- I will be proceeding with filing an Affidavit of Heirship form. Exactly which, if any, parties are required to be present when the form is notarized?

A notary attests to the identity of someone signing a document. It's the signature that gets notarized. The person(s) signing must be present for this.

2- Does each potential heir need to fill out a separate form and have it notarized separately? Can I record the information on behalf of the parties?

You are very much mistaken. The heirs do not and CAN NOT the the affiant on the affidavit. It has to be someone who knew the deceased and the identity of the family and heirs but is not economically involved with the deceased or the estate.

3- Is the "Letter of Testamentary" obtained from the county clerk's office after submitting the affidavit?

You don't get letters testamentary when you're doing the affidavit of heirship process.

4- Should I take immediate occupancy? The Death Assumption Package states "You MUST occupy," but does not designate any timeline. This is an EXTREMELY sensitive point because I have a 6-yo son and he would have to transfer schools. My worst fear would be that this became an unstable "squatter" situation where the county would show up with an eviction notice.

This is a point between you and the bank. I'm not sure what squatter/eviction issue you're talking about. The bank wants to assure that the property is owner occupied and not vacant or rented out. The worst thing that's going to happen is that they accellerate the loan and foreclose. You can always refinance.

5- At what point can I obtain a Quick Claim Deed (or equivalent) and how/where/when do I start that process?

First off, the term is "quit claim" and who do you think is going to issue one? The affidavit is your deed essentially, you record it in the land records. Deeds aren't like car titles. You don't get "one" that idenfies your ownership.

Frankly, you seem to be a bit confused, it would probably behoove you to get a lawyer involved in the preparatioin and recording of this. I'd also suggest you obtain owner's title insurance on the property.

 

[justalayman]

You do not have to assume the mortgage. If you take ownership of the home due to the death of a relative, there is no requirement to formally assume the mortgage. You would be able to simply continue to pay on the mortgage until it is satisfied

 

[CrisCo71]

You do not have to assume the mortgage. If you take ownership of the home due to the death of a relative, there is no requirement to formally assume the mortgage. You would be able to simply continue to pay on the mortgage until it is satisfied

That isn't considered fraud? The company has a copy of the death certificate on file; I don't have a problem with that if they (and the feds) don't...

 

[LdiJ]

That isn't considered fraud? The company has a copy of the death certificate on file; I don't have a problem with that if they (and the feds) don't...

No, its not. You really could have held off notifying the mortgage company while you kept making the payments, until you had time to leisurely research this and figure out how to handle it. You have really made this far more complicated than it needed to be. You would have known that had you consulted an attorney to start with.

On top of that, the mortgage company CANNOT foreclose if they are being paid in a timely manner. The rare mortgage might allow for the loan to be called, but then you would just need to refinance. I personally have never seen a mortgage called when someone inherited it with a mortgage, as long as the mortgage was promptly paid.

 

[Zigner]

The rare mortgage might allow for the loan to be called, but then you would just need to refinance.

Ummm...no. Not in this situation.

 

[justalayman]

That isn't considered fraud? The company has a copy of the death certificate on file; I don't have a problem with that if they (and the feds) don't...

The garn st. Germain Act specifically allows it. If inheriting property with a mortgage loan in place,
Due to the garn st germain act any due on sale/transfer clause is not enforceable.

 

[LdiJ]

Ummm...no. Not in this situation.

That is why I said "rare" and "might". I wasn't prepared to say that there was absolutely no chance at all, even though I really think that there is no chance at all of the mortgage company being able to call the loan.

 

[justalayman]

That is why I said "rare" and "might". I wasn't prepared to say that there was absolutely no chance at all, even though I really think that there is no chance at all of the mortgage company being able to call the loan.

It's not only not rare and not even maybe. I am prepared to say there is absolutely no chance at all because the law specifically excepts a due on transfer clause be enforced if the transfer is to a relative
Due to the owner dying.

(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
(2) the creation of a purchase money security interest for household appliances;
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(4) the granting of a leasehold interest of three years or less not containing an option to purchase;
(5) a transfer to a relative resulting from the death of a borrower;

 

[FlyingRon]

Ummm...no. Not in this situation.

The death of the owner isn't going to invoke a due on sale clause (by Garn-St. Germain) but if the property is left vacant, there may be other enforceable clauses.
Still it's unlikely provided the mortgage is getting paid.

 

[CrisCo71]

No, its not. You really could have held off notifying the mortgage company while you kept making the payments, until you had time to leisurely research this and figure out how to handle it. You have really made this far more complicated than it needed to be. You would have known that had you consulted an attorney to start with.

On top of that, the mortgage company CANNOT foreclose if they are being paid in a timely manner. The rare mortgage might allow for the loan to be called, but then you would just need to refinance. I personally have never seen a mortgage called when someone inherited it with a mortgage, as long as the mortgage was promptly paid.

I was afraid of the above but finances for legal counsel are nil and any 'free consultations' were either not free, not available anytime soon or just not responsive at all. As I stated, my son's stability is paramount and time being a crucial factor, I went with what I felt was the high-road approach. However, any further actions will proceed legal consult - thanks for reinforcing that point.

As well, thank you to everyone for your input - I am going to assume occupancy within a few days and do whatever is needed to keep this home.