If the seller of real estate who is carrying the mortgage on the home passes away, can the estate call in the loan?

UPDATED: Jan 2, 2012

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If the seller of real estate who is carrying the mortgage on the home passes away, can the estate call in the loan?

My former father-in-law sold a piece of property and the buyer was making payments to him. He passed away and now the executrix of the estate is trying to get the buyers out of the house so she can re-sell it. Before the seller passed away, the executrix had already started refusing to give the buyers a receipt for their house payments? I do not know by what method they were paying, cash, money order, etc.

Asked on January 2, 2012 under Estate Planning, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The estate may *only* call in the loan early if the loan instrument(s) or document(s)--e.g. the promissory note--specifically allowed this. Otherwise, the death of the mortgagee does not mean that the mortgage becomes due and payable immediately; the buyers can continue making payments as per the terms of the loan; they are making to the estate, for payment of the estate's costs/debts and/or distribution to beneficiaries. So long as they continue to make payment as per the loan document, they may not be evicted.

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