Inherited Property in Foreclosure
The Property I Inherited is in Foreclosure
Your mother recently passed away and unfortunately prior to her passing her property fell into foreclosure because she was unable to make her monthly payments after becoming ill. With all of the emotion you are experiencing from your loss, now you have this foreclosing lender to deal with.
What you Should Do
You have a couple of options, although limited. You can file a written disclaimer refusing the inheritance. Once you do this, you cannot gain any financial benefits from the sale of the home nor can you reclaim the inheritance. The process must be done within nine months of your loved ones passing. If you are able to make the payments on the home and bring the inherited home into current loan status, that is an option and if you and the other heirs agree, you could then sell the home. Another option is to let the home go into foreclosure if you so choose. This will not affect your credit individually as it will affect the decedent’s estate. However, if the bank decides, they can choose to go after the estate of the deceased to be paid what they are owed for the loss they incur from selling at a trustee sale. This can affect any other inheritance you may be receiving from the decedent’s probated estate. A short sale and a deed in lieu of foreclosure are options for heirs of the decedent as well. The process works the same as if you were the one holding the mortgage and the estate can be subject to possible deficiency judgments or adverse reporting.
Probate and Foreclosure
To probate a decedent’s estate the family petitions the court to determine a personal representative for the estate. This personal representative, often known as an executor or administrator, can be the estate’s voice with the foreclosing lender. The lender does not have to stop foreclosure proceedings when an estate is probated, however, the estate does have options to pursue other avenues such as a loan modification if the heirs would like to keep the property or a short sale if the heirs would like to sell the property.