Q: Can the lender take ownership of the home if no one officially takes over the loan officially?
My grandmother had refinanced her home prior to her death. She left 6 children behind and my aunt has been making the payments for a month that she's been deceased. She wants to continue to make the payments to the lender but want to know if later this will be of no use if an heir doesn't take ownership of the loan? Can the lender take ownership of the home if my aunt or no one officially takes over the loan even if it's not in default?
A: Federal law prohibits a lender from foreclosing for six months after the court appoints an executor or administrator. After that, the lender can foreclose. Whether the lender will allow someone to "take over" the loan is really a question of whether that person qualifies for a new loan replacing the current one and, in this case, sufficiently large to allow them to buy out the interests of the other heirs (or other people also willed the home). The loan was made based on your grandmother's credit, not your aunt's.
1 user found this answer helpful
A: As long as someone keeps making the payments, the lender cannot foreclose.
The lender can only take ownership of the home by foreclosing, if there are no higher bidders.
As long as the loan is being paid, the lender doesn't have the right to foreclose (unless some other condition of the loan is violated - you sometimes see this with violation of the due on sale clause of the deed of trust).
If your aunt wants the property, she should make arrangements with the heirs to buy the property (she can't buy the loan, because they don't own the loan, the lender does). It's likely that there needs to be a probate of grandmother's estate. Talk to a probate lawyer.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.