Saturday, January 8, 2011
Foreclosures After Death
About four months ago, a neighbor of ours passed away due to cancer. During her cancer treatment, she was unable to work and we had heard her mortgage was in foreclosure as she had a job that only paid if she was there. Her chemo treatment wiped out all of her energy and left her very sick, so when she passed, we were sad to see that her house was up for sale under a foreclosure.
I can only imagine how difficult it had to be for her to go through chemo, not be able to work, and to know that her home was in jeopardy of keeping.
I saw her mom a few weeks after my neighbor's passing and I asked if she was going to move into the home, but she said no, the mortgage was too far in the rears to try to keep it. I knew that the mother had considered moving into the home, as it was a lovely way to remember her daughter, but she could not afford to get the payments caught up.
Rick, the Probate Guy, looked at a similar situation where the father of a deceased son was being brought into a foreclosure legal suit and the father was concerned he would be responsible for the amount owed on the home that was in foreclosure. A little different facts, but it's important to know that if you are handling an estate for another and there are debts being collected including a foreclosure on a home, you most likely need to contact an estate lawyer in the state of the property to research the best course of action.
While you, the executor, are NOT held liable for the decedent's debts, the estate may very well have to pay the debts, including any foreclosure activity in order to bring the past-due payments current, if there are funds available from the estate. There is always a possibility that the estate lawyer can negotiate the best outcome for the estate, even when a foreclosure is involved, so it's worth at least a preliminary phone call with an estate lawyer you have researched and trust.
I wish the mother had moved into her daughter's home as they are a wonderful family and we would have loved to have her as a neighbor. I will always wonder if she contacted an estate lawyer to see if she could save the home through some sort of negotiations with the bank, but after a loss of a daughter, that is not a question I could ask.