Dallas, TX asked in Foreclosure, Real Estate Law, Arbitration / Mediation Law and Banking for Texas

Q: If someone passes away with a mortgage can their children just give the house back to the bank and walk away?

The bank is saying the family has to keep paying the mortgage until the house is sold. She had cancer and there is no life insurance or money left in her account. They are also saying we are responsible for selling the house

2 Lawyer Answers
Samuel B. Edwards
Samuel B. Edwards
PREMIUM
Answered
  • Arbitration & Mediation Lawyer
  • Houston, TX
  • Licensed in Texas

A: Generally, yes, you can turn the house back over to the bank. The bank would typically have you sign a deed in lieu of foreclosure form. However, that is often not the best option. There are investors who specialize in buying properties "subject to" an existing mortgage and they will take over the payment, fix up and sell the house. That could save issues related to the bank trying to come back and obtain from the estate any deficit from what the bank obtains in a sale versus what is owed. Might even find a nice investor to work with you for living arrangements, etc., as needed, if there is reasonable equity in the house.

Bruce Alexander Minnick agrees with this answer

Vincent Gallo
Vincent Gallo
Answered

A: The “family” is not personally obligated to pay the Mortgage, unless the “family” executed the Note.

Bruce Alexander Minnick agrees with this answer

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