Q: Are any mortgage companies exempt from allowing you to assume my deceased mother's mortgage?
My mother recently passed away. Trying to get things taken care of, my sister called the mortgage company to inform them of her passing. While speaking with someone, she asked about us assuming/taking over the mortgage. (My mother willed her mortgaged home to both my sister and I) They told her, while some banks allow this, they do not. That we would have to sell the home and pay off the mortgage or get a loan to pay off the mortgage. I didn't think they were allowed to do this. They said because they are a bank (even though their company has mortgage in their name) that do not allow the transfer upon death to a family member. We tried to find my mother's loan agreement, to look it over to see exactly what type of mortgage she had. So far we've been unable to locate it. I know it was a 30 year loan, they borrowed the money on a home that had no original mortgage. So my question is, are there any banks/mortgage companies that do not have to allow us to transfer the home into our name?
A:
The mortgage (to be enforceable) needs to be recorded with the land records in the county where the land is located. Go look it up there if you can't find your mother's copy.
There ARE some mortgages that are 'non-assumable' and that should be spelled out in the documentation. You can 'remortgage' the property as a part of the Probate assignment process if you need to, but it is often easier to simply sell and pay off the amount due, and distribute the money equally amongst those entitled to it. There is no 'one right' way to do this, and if you don't already have a Probate attorney in Indiana (assuming that is where your mother lived before she passed) you should hire one! There are many traps for the unwary, and Federal banking law often 'wins over' when language in the loan is different than that allowed under Federal Law but without reviewing everything it is impossible to say how things might affect your situation
Seek local representation if you are at all unclear of what is going on here!
--This answer is offered for informational purposes only and does not constitute legal advice or create an attorney/client relationship. I am licensed to practice in Michigan only. Please seek competent local legal help if you feel you need legal advice!
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