Manteca, CA asked in Probate and Real Estate Law for California

Q: Hello, I just inherited property with a mortgage through probate. The decedent was my aunt.

I inherited the property as equally shared between my mom (decedent's sister), my sibling, and I. From prior research, I thought we would have to "assume" the mortgage, but now I see that we could be "successors of interest"? Would we be able to stay as "successors" without assuming the mortgage until it is paid off (no matter how many years that may be)?

I'm aware of the Garn-St. Germain Act. Will we always be protected by this regardless of if we are "successors" or "assume" the mortgage? Thank you!

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2 Lawyer Answers
Nina Whitehurst
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A: IF THIS IS A HOME, pursuant to the Garn-St. Germain Act, the lender cannot call the loan due solely because the borrower died and relatives now own the home. But the lender can foreclose if the payments are past due.

Pursuant to other federal regulations, none of the inheritors must "assume" the loan in order to receive information regarding the loan and in order to keep making the payments. But you do need to provide the lender with enough information so the lender knows that the borrower died and you all are the new owners.

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James L. Arrasmith
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A: As successors in interest under California law, you and your family members can indeed continue paying the existing mortgage without formally assuming it. This protection comes from the Garn-St. Germain Act, which prevents lenders from triggering the due-on-sale clause when property transfers to relatives through inheritance.

You can remain as successors in interest indefinitely, making regular payments on the original mortgage terms without having to refinance or formally assume the loan. The key is to notify the mortgage servicer of your aunt's passing, provide documentation of your inheritance rights, and request successor in interest status. This status gives you many of the same rights as the original borrower, including the ability to receive monthly statements and request loan modifications if needed.

However, consider consulting with a real estate attorney to fully understand the implications for your specific situation. While staying as successors in interest might seem simpler, formally assuming the mortgage could offer advantages depending on your long-term plans for the property and your family's financial circumstances. The Garn-St. Germain protections will apply either way, but your choice between these options might affect your ability to modify the loan terms in the future.

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