Many people assume that when an estate is involved, foreclosure on a loan secured by a mortgage (trust deed) will be delayed. Unfortunately, this is not the case in California.
Foreclosure
on a home in succession is possible, and it is important to understand why and what to do about it. The death of the landlord does not dissolve the mortgage agreement, so the deceased person's estate must make mortgage payments.If the decedent's estate fails to pay the overdue mortgage amounts, the bank has the right to foreclose on the home even during the probate process. This applies to all types of property, including houses, apartments, land, and more. If you are facing foreclosure on a property during probate, Evident can help you connect with an attorney who can explain your rights and options. Possible ways to stop foreclosure include reinstating the loan, exchanging the property before the sale, or filing for bankruptcy.
You may also be able to find a loss mitigation option such as a loan modification. If someone in your family dies and they were the only one on your mortgage note, you may have to go through an estate. Hunt is a California law firm that specializes in estate planning, trust management, litigation, probate and adult guardianship. The estate of a deceased person can go through probate regardless of whether or not they had a will, although there are ways to avoid legalization of certain assets.
Regardless of why the decedent's mortgage goes into arrears, if mortgage payments are not made, the bank has the right to initiate foreclosure proceedings on the home during probate. Succession is easier when there is a will, but even with a will that names an executor, probate is still necessary to determine if there are any challenges. If any real estate is subject to a mortgage, it is important to consult with a probate attorney about the best course of action. The purpose of the petition is to “admit the will to legalize and appoint an executor or to appoint an estate administrator and to notify the heirs and beneficiaries”. In short, yes, foreclosure can occur if the landlord has died and ownership of the property is being determined by a probate court.
There are also ways to avoid succession altogether through a living trust and an improved life property deed (also known as a Lady Bird deed).Human error is often responsible for foreclosures during probate as bereaved family members forget to continue making monthly mortgage payments or mistakenly believe that the home is paid for. A good lawyer can inform you of your options and guide you through what could otherwise be an extremely overwhelming process. While probate foreclosure happens all too often, it is possible to save a home that is part of a foreclosure estate estate. If you ever find yourself in this situation, Evident can help you connect with an attorney who can explain your rights and options.
