Asked in Real Estate Law and Estate Planning for Alabama

Q: Can a mortgage company call a loan due if the person who can assume the loan is being difficult or non responsive?

I am the executor of an estate. A beneficiary of a home (due to a person being deceased) has been granted status as successor of interest. The payments have been kept up via automatic payments under the deceased persons account. If with these circumstances, can the loan be called DUE NOW if he doesn’t respond to the mortgage company about documentation needed to see if he can be approved for the loan? His name is neither on the loan NOR is it on the deed. He has been Successor for over a year. He hasn’t provided the documents required but he also hasn’t said he was moving either. Can they eventually foreclose on the home if he’s being difficult.

1 Lawyer Answer
Nina Whitehurst
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  • Estate Planning Lawyer
  • Crossville, TN

A: A home mortgage lender may NOT call a loan due on account of the death of the borrower if the lender has been informed that the property will be inherited by a relative. Your facts did not say whether or not this is case, but that fact is highly relevant. If a relative is the beneficiary/successor in interest, then that person does NOT need to assume the loan and the lender cannot call the loan due if the relative refuses to assume the loan. The lender must keep accepting payments from the relative/beneficiary/successor in interest and must provide information about the loan upon the request of the relative/beneficiary/successor in interest, such as regular monthly mortgage statements and payoff statements when requested.

If the beneficiary is NOT a relative, then the lender may call the loan due if the relative refuses to assume the loan or if the bank does not approve of the relative assuming the loan.

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