Mortgage #1. Say a parent passes away and they have a mortgage that you cant really swing. Plan would be to sell the house but in dealing with a will, cleanout, prep, listing, contract, and closing, fastest that happens is maybe 4-5 months. Will the mortgage company allow a forbearance until it is sold? If not, do you just stop paying knowing you'll get it sold before it can be foreclosed on? Current owner lives off of pension incomes that will go away at death and has no cash assets to pay off the mortgage at death.

Mortgage #2. They own a great rent house. It was originally an owner occupant loan. 30 year, low interest rate. The type of loan you'd love to keep. Will the bank typically allow you to assume this loan? If not, could you just keep paying it and not inform them?

The correct answer is call an attorney.

My guesses is 1 is yes you can likely beat the foreclosure if you communicate with the lender.

And 2 the house might be assumable if a FHA/VA loan. Doubtful any other type. So an estate sale to the new owner for cash or new loan.

Again just spit balling.

Once the lender gets insurance in another name they'll know so no you can't just not tell them and keep the same loan.

Corps_Ag12 said:

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Not an attorney or your attorney nor is this considered legal advice.

When my dad died we had a TOD deed from my grandfather to him and then him to me. Chase did not care who was making the payments or was on the insurance as long as the payments were made.

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had a family member do this as well. never notified the bank the owner passed, and no harm. however, when they started having financial issues and couldn't pay it fell apart and the bank quickly took over and they were out of a home.

also not sure what would happen if you had to make an insurance claim

Is there a will? If so, who does the property go to under the will? If the owner died intestate, you potentially have much bigger estate headaches.

If there is a will, what type of estate is going to be opened? If the property is going to one person, that person may want to get in contact with the lender for a forbearance - or just pay the mortgage payments until the estate is resolved (assuming the value of the equity in the property is worth it).

I don't understand the second scenario, is it a different person that mortgage number 1? If so, similar issues upon death of the individual. You will likely be able to continue the payments to the mortgage company without them doing anything. Your bigger issue will be how to get clear title to a certain person or persons, and how to handle insurance on the property.

CS78 said:

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Mortgage #1. Say a parent passes away and they have a mortgage that you cant really swing. Plan would be to sell the house but in dealing with a will, cleanout, prep, listing, contract, and closing, fastest that happens is maybe 4-5 months. Will the mortgage company allow a forbearance until it is sold? If not, do you just stop paying knowing you'll get it sold before it can be foreclosed on? Current owner lives off of pension incomes that will go away at death and has no cash assets to pay off the mortgage at death.

Mortgage #2. They own a great rent house. It was originally an owner occupant loan. 30 year, low interest rate. The type of loan you'd love to keep. Will the bank typically allow you to assume this loan? If not, could you just keep paying it and not inform them?

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Get an estate attorney.

But, in my experience,, banks typically allow you a few months to sell the home if you declare that is your intention. (Those mortgage payments will be taken out of the sale proceeds).