Q: Have the title, but line of equity isn’t in my name. What happens when we move?
When my parents passed away two years ago, the title of their house passed to me. They had a home equity line of credit that passed to the estate, not me. I had been living there and paying the loan monthly anyway, so we just continued as is. The bank did not pursue the house when my parents’ accounts were in probate court. However, the account’s name is still in the Estate of my parents. My husband and I are looking to move within the next few years, and are not sure how that will proceed with the current house.
A: You would need to do a search on the county recorder's website to see if the bank has a mortgage on the property that is securing the line of credit. If so, then the loan would need to be paid off when the house is sold.
A: The title to the property passed to you encumbered by the home equity lien. You have the option of paying off the lien and owning the home free and clear of any lien, or you can walk away allow the lien to be foreclosed upon. You will be named as an heir in the foreclosure, but you can disclaim your interest at that point. If the house has equity (worth more than you owe) you may want to answer the foreclosure, but the debt is not yours so a collection action will not hurt your credit.
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