When parents pass away, what happens if their house is not paid off and quite possibly underwater?
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When parents pass away, what happens if their house is not paid off and quite possibly underwater?
Dad died last year left everything to Mom; Mom just passed. There is a Will that states the 3 son’s get everything to divide amongst themselves. The parents just had a house that is possibly under water, there are no big bank accounts or land or other property. My husband’s brother got the notion that the boys will be responsible for what the house doesn’t sell for. I have about 12+ years collections, foreclosures and repossession experience but I have never ever heard that. The aunt is the executor of the Will.
Asked on April 3, 2012 under Estate Planning, California
Answers:
Hong Shen / Roberts Law Group
Answered 12 years ago | Contributor
Mortgage will follow the property, not the borrower. So when the boys take the property, they would also inherit the debt and must pay the balance of the mortgage as well. The other options is that since the house is under water, the boys could disclaim the property and let the bank take it back. The bank can resell it and get whatever the sale price. You should consult an estate attorney to see the best options out there.
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