When a landlord passes away, the mortgage agreement does not dissolve. The estate of the deceased must continue to make payments on the mortgage. In Texas, an Attorney-prepared Order of Title is a more reliable option than an Affidavit of Inheritance. However, if there are unsecured debts such as credit card bills or unpaid medical bills, the Muniment process cannot be used.
Mortgages and rental properties are considered secured debts, so the Muniment process can be used. If your property is in foreclosure, you may be able to renegotiate your loan or refinance it to stop foreclosure. You can also send your questions to our lawyers and they will post the answers on our website. In order to meet the requirements of a valid application under Section 131A of the Texas Probate Code (and Section 81 or 82 of the Texas Probate Code, as applicable), the creditor's attorney must conduct a thorough investigation of the facts and circumstances involved.
The personal representative of the estate must use the assets of the estate to keep up with mortgage payments until it is sold or transferred to a new owner. Short selling and deeds instead of foreclosure must be approved by the investor who owns your loan, which can require negotiations and a difficult application process. A dependent administration is a type of will that requires judicial supervision. The personal representative appointed by the probate court has a fiduciary duty to manage assets wisely and do everything possible to stop foreclosure using other assets of the estate, such as liquidating assets or selling the home.
In some cases where family members know that the home is “submerged” (fair market value is lower than the main mortgage balance), they may decide to let it go into foreclosure if it's not worth it. However, probate is complex and requires a competent lawyer. The processes up to, including and after appointing a temporary administrator are detailed in Sections 131A (appointment of temporary administrators), 133 (powers of temporary administrators), 134 (accounting) and 135 (closing) of the Texas Probate Code. An independent administration is a type of will in which the administrator has broad authority to act without much oversight by the court. Most lenders will only work with the court-appointed personal representative, but some may be willing to work with family members to resolve foreclosure.
In conclusion, yes, foreclosure can be foreclosed if ownership of the property is being determined by a probate court. A foreclosure sale under a trust deed is void during dependent administration unless lenders comply with the process outlined in the Probate Code. If lenders are not willing to stop foreclosure, ask your attorney to obtain a court order for stop foreclosure and give you reasonable time to liquidate assets.
