Q: My dad passed with mortgage on house in NC. We can't afford/don't want it. Can the mortg co come after POD account
The house is probably only worth what's owed on the mortgage due to slow and flooded real estate market. The rest of the estate consists of a high mileage 2007 vehicle worth about $3k, a utility trailer $200,and household goods/clothing around $500 (yard sale price) and a possible refund from a cc purchase that was cancelled of approx $7,620. According to what I read on line POD, TOD, life ins and a few other items are exempt due to assigned beneficiaries. We (my siblings and I) do not live in NC. and want to let the house go into foreclosure. Can the mortgage company come after the POD/TOD accounts? Can I do the small estate to close out everything else & sale/donate the household goods, van & trailer? If so can I do it myself or do I HAVE TO hire an attorney in NC? I'm getting conflicting info on all the above. Thank you for your help.
A:
In order to open an estate, even for a small estate, if the personal representative of the estate does not live in North Carolina, you will need a resident process agent. That can be a trusted friend, but most often it's an attorney.
Regarding the house, I recommend you get an experienced realtor to give you a market analysis. It might be worth more than you think and you would be throwing away money. If it is indeed not worth more than what is owed, you can contact the mortgage lender and see if they will allow the estate to sign a "deed in lieu of foreclosure." If they agree, that's cheaper and faster for them and you won't have to worry about the foreclosure notice being in the paper or the estate getting notices of every step of the foreclosure process. Real estate in North Carolina becomes property of the heirs upon death. It is only brought into the estate if it's needed to pay off debts.
If the house is foreclosed and there is a deficiency between what the house sells for and the debt, the mortgage company could conceivably go after the estate. But it cannot touch the financial accounts and life insurance that passed to you and the other beneficiaries. Those pass outside the estate as well.
It looks like you could file an Affidavit for Collection for the rest of the assets, which is quicker than a full estate.
You do not have to hire an attorney to handle this, but I would recommend you do.
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