What to do regarding foreclosure of inherited property with home equity loan?
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What to do regarding foreclosure of inherited property with home equity loan?
I received a letter that states that the bank has filed a motion to move on their foreclosure petition,
and I go to court tomorrow. This is the home of my late grandmother and she left it to my sister and I. My mom and sister live in the home. Are the constables and police going to throw them out? What can I do? They have nowhere to go I reached out to the bank when she passed away in 2 years ago, no instructions were provided to me since I was not listed on her account but according to her Will I am the power of attorney. The loan is behind 2 years.
Asked on April 4, 2018 under Real Estate Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
It doesn't matter that the home was left to you, or that your mother and sister live there, or that you have power of attorney. All that matters it that the home equity loan was not paid. When your grandmother took out the loan, she gave the lender a security interest and agreed that if the loan were not repaid, they could take the home and sell it to recover the money due to them. That security interest predated you inheriting the home and takes precedence or priority over the inheritance: inheriting does not wipe out, invalidate, or make unenforceable a pre-existing loan or the security interest.
Living there gives your mother and sister no rights in or to the home--they can stay only so long as whoever owns the home lets them stay. After the foreclosure and the foreclosure sale/auction, that will be whomever buys the home at the foreclosure--that person or entity, which may well be the bank, can remove your mother and sister from what will be his, her, or its property at will, because they will have no right to stay in someone else's property.
That they have nowhere else to go is completely irrelevant: having nowhere else to go would not let them live in the bank's property (or the property of anyone else who buys the home in foreclosure) any more than a homeless person could demand to live in your home because they have nowhere else to go.
So yes--after the foreclosure, your mother and sister can removed from the home. If you can make good on the arrears or unpaid amounts due under the loan, you and your sister (the ones to whom the home was left) should be able to keep the home, but otherwise, it will be foreclosed upon and the occupants removed.
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