A BANK CAN FORECLOSE ON A HOUSE IN PROBATE, AND IF THAT HAPPENS, THE EXECUTOR MAY BE ABLE TO SELL IT.
However, every situation is different – and if you’re faced with a case like this, it’s a good idea to talk to a probate real estate agent who can help.
How a Lender Can Foreclose on a House in Probate
A lender can pursue foreclosure when a house is in probate for several reasons. The house might be in foreclosure when probate begins, or it might go into foreclosure when the estate’s executor doesn’t make payments on the loan.
Probate does not affect the mortgage repayment process. When a person dies, the loan is not automatically forgiven and the payments must continue as usual. It becomes the executor’s responsibility to make mortgage payments. Many lenders are willing to work with an estate’s executor, whether the home is already in foreclosure or it’s in danger of foreclosure, but the executor must contact the lender.
What Can an Executor Do About Foreclosure?
Sometimes an executor who does not want to keep paying on a house, provided that the house is worth more than the mortgage owed on it, can sell it. If it’s worth only a little less than the balance due on the mortgage, the executor might be able to use a short sale. The Realtor® involved in the transaction would be able to work with the lender to determine the best option, but most importantly, if you’re in a situation like this, you need to work with a real estate agent who has plenty of experience with probate real estate. Inexperienced agents could let important details slip through the cracks that a more seasoned agent would prevent.
In some cases, executors decide to allow a foreclosure to proceed. However, the executor has a duty to safeguard the deceased person’s assets to the best of his or her ability, so it’s important that you know choosing to allow a foreclosure to proceed can be risky.
Do You Need to Talk to a Realtor Who Understands Probate and Foreclosure?
If you’re an executor dealing with a property that’s already in foreclosure or is about to be foreclosed on, we may be able to help you.
Call us right away at 800-804-0540. You don’t have much time to spare, so call today.
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