If your spouse has passed away, you may be concerned about maintaining payments on your home or accessing loan data that only your spouse had access to during their lifetime.
There are some federal laws which allow surviving spouses to obtain mortgage information, even if they did not co-sign for the loan. These laws may also provide protection against a foreclosure proceeding.
My spouse is gone, is the mortgage automatically paid off?
Unfortunately, debts don’t just automatically disappear when someone dies. The lender will require that payments are made on time and has the option to initiate a foreclosure action if the borrower’s estate is in default.
What happens to the home and mortgage will depend on whether the deceased spouse executed estate planning documents, how the home is titled, who signed the note on the property, and what type of life insurance the deceased spouse had. Sometimes the surviving spouse automatically inherits the property, but not always.
Can the bank foreclose if I was not included on the mortgage?
Indeed, there are some cases where the bank can accelerate loan payments, requiring it to be paid in full if the property is transferred to a surviving spouse. However, federal law exempts certain transfers from triggering this ‘due on sale’ clause.
Can I assume the mortgage after my spouse dies?
The good news is that the Financial Protection Bureau has enacted rules making it easier for a surviving spouse to assume a deceased spouse’s mortgage debt. In some cases, the surviving spouse will not have to prove they can afford the mortgage before assuming the loan. However, if you are having trouble making payments, you may need to request a loan modification from the lender.
Probate and Trust Administration at Death
Handling debts and properly retitling real estate property are some of the key responsibilities entrusted to the Executor of a Will or Successor Trustee of a Revocable Living Trust. Understanding the timelines and legal ramifications of these tasks is key to preserving the assets of the estate.