Q: Can a parent leave a house to their adult children if there's outstanding debt?
My father doesn't think he can leave my sister and I the house because he says the bank still owns it technically. He doesn't know where the deed is, but the courthouse should have it. I don't know what to do. He's in a rehab facility currently, he's 82. He says he said the reason he doesn't have a will is because he doesn't own anything. My sister and I need the money from the eventual sale of this house to start our lives over. Both of us are broke, been living here taking care of both parents for about 10 years. My mom passed in 2019. Any help you could offer me would be great, at least maybe get me started in the right direction? Thank you very much
A:
Yes, of course, assuming the property is located in PA. The owner of the property (him) owns the property, and the bank with a mortgage against the property has a mortgage lien against the property. So long as payments are made in accordance with the mortgage Note, the bank had no right to possession of the property; nor can the holder of the mortgage and Note foreclose.
Ownership of the property passes to the heirs of the current owner. The most recent recorded Deed (recorded at the office of the Registrar of Deeds in the county where the property is located) shows the current owner of record of the property.
Especially given the rise in the real estate market over the past five years, there is no doubt some value in the property, which can be realized from a sale of it.
I have encountered this concept of the bank's owning a property before, when all it has is a Mortgage. That owner was Asian, originally from Singapore. It was somewhat difficult to convince her of the meaning of lien and ownership in PA.
Nina Whitehurst and Anthony M. Avery agree with this answer
A: Heirs will own the property subject to the secured debt instrument unless they personally assume the note.
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