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what happens after death of mortgage borrower, i'm on the deed but not mortgage

This is a discussion on what happens after death of mortgage borrower, i'm on the deed but not mortgage within the Buying & Selling Property forum, part of the REAL ESTATE & PROPERTY LAW category; First,thank you for your time. I have a question regarding a home that I live in. In 2004 my grandparents ...

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Old Feb 24th, 2010, 01:01 PM   #1
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Default what happens after death of mortgage borrower, i'm on the deed but not mortgage

First,thank you for your time. I have a question regarding a home that I live in. In 2004 my grandparents and I bought a house in Easton, MD that I live in. I am on the deed with them but they are the only ones on the mortgage loan. My grandparents both died in may of 2009 and I have been making payments in there names, we still owe about $120,000. My question is what should I do? Should I tell the bank(BB&T) that they died, I don't think I have good enough credit or job for them to give me a mortgage loan and I'm afraid they will foreclose the house if I tell them of there death. I've heard of a mortgage life insurance that pays off the balance of the mortgage upon death, how do i find out if they had that? I know we have mortgage insurance but I'm not sure if that's the same thing as mortgage life insurance. I have a big family and I am scared I'll lose this house and we'll have nowhere to live. Any advice you could give me would be a blessing and I would be soooo greatful. So thank you again for your time!
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Old Feb 25th, 2010, 10:28 AM   #2
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Default Re: what happens after death of mortgage borrower, i'm on the deed but not mortgage

I wish to inform you that you will have to inform the fact of death of your grandparents to bank. In this you may not pay for the person who have expired. Further the bank may not call for foreclosure. In this Garn St. Germain Act provides protection to you. Under US Code Title 12, Chapter 13, 1701j–3 provides about preemptions of due on sale prohibitions. In this it is provided that in case a residential property is transferred to a close family member and if the residential property is less than five dwelling units then lender cannot call the loan if you are always on time in payment. Mortgage insurance is basically an insurance policy which provides that in case of death of the person the insurance company will pay the loan. Further in mortgage life insurance the insurer pays outstanding loan amount on death of a person. Lastly both mortgage insurance and mortgage life insurance are similar.

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Old Feb 25th, 2010, 03:20 PM   #3
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Default Re: what happens after death of mortgage borrower, i'm on the deed but not mortgage

Affa is, as usual, in some small part right and in large part waaaay off base.

Mortgage insurance is totally different from a mortgage life insurance policy.

Mortgage insurance is paid for part of the life of the loan, bc the borrower put down a small amount perhaps, as a guarantee of payment in the case of default.

The life insurance is to pay off the loan in the event of the death of a borrower. If you can find your grandparents original loan docs, it will be in there.

If you continue to make the monthly payments the mortgage company cannot "call the loan" which would make you have to find financing.
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Old Feb 26th, 2010, 02:03 PM   #4
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Default Re: what happens after death of mortgage borrower, i'm on the deed but not mortgage

First things first. You are committing fraud by failing to inform the bank that the mortgagees are both deceased. The bank then has the right to either attempt to settle up with your grandparent's estate.

Did either or your grandparents have wills/living trusts?

You cannot take out mortgage insurance or mortgage life insurance (two separate polices for two totally separate things) because the house is not in your name as a mortgagee.

You must legally inform the bank that both of your grandparents, who are the legal mortgagees, are deceased. How you've gotten away with it as long as you have is a mystery. Surely some other family member (adult children of the grandparents, for instance) came forward to take care of funeral/estate arrangements?

By not informing the bank, this may have, in of itself cause you stress, as if the grandparents did, indeed, have mortgage life insurance, the home may have been paid off by now and you'd be worry free.
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Old Oct 2nd, 2010, 11:07 AM   #5
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Default what happens after death of mortgage borrower, i'm on the deed but not mortgage

First,thank you for your time. I have a question regarding a home that I live in. In 2001 my fiance and I bought a house in Maine that I live in. I am on the deed with him but he is the the only one on the mortgage loan. My Fiance died in october of 2004 and I have been making payments in his name, we still owe about $120,000. My question is what should I do? Should I tell the bank(BB&T) that he died, I don't think I have good enough credit or job for them to give me a mortgage loan and I'm afraid they will foreclose the house if I tell them of his death. I am scared I'll lose this house and I will have nowhere to live. Any advice you could give me would be a blessing and I would be soooo greatful. So thank you again for your time!
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