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What happens to a FHA loan house on death?

What happens when a home owner with a FHA mortgage dies? He recently refinanced and owes more than the house is worth? Will the FHA take the house? He is not quite dead yet, but is dying and not able to research himself. He lives in the home in Colorado.

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi mmichael!

Welcome to forums!

If the mortgage payments are delinquent, then the lender would definitely foreclose the property to recover the dues. After his death, if his heirs pay off the dues, then the lender will not foreclose it. In case, if making the payments have become impossible for the borrower, then it's better to sell off the property. The borrower can contact the lender for a deed in lieu of foreclosure and sell off the property. Though his credit will get lowered by 250 points, he won't be responsible for paying the deficient amount.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:18 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i suspect a dying man wouldn't be too concerned about a 250 point drop in credit score. the first part of your post, sussane, made some sense. if there are any heirs, they can, if they choose, pick up on payments. then again, if they don't care, it's not like the lender can ask them for the payments.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:18 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

my mamaw'S HOUSE IS ALMOST pAYED OFF AND SHE JUST PASSED AWAY. Can we pay the remainder of her loan off with our own money or do we have to refinance the loan with FHA?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:18 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome virginia,

You can off the rest of the loan in full and get the property transferred in your name. However, if you cannot pay off the mortgage in full, then you'll have to refinance the loan and convert it in your name.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:18 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My mother is 87 and in poor health. She paid off her FHA loan, but we keep getting notices that she owes 66,000. When she passes away, will her heirs be responsible for the 66,000.? Is the house hers to sell?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:18 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Connie,

If she had paid off the debts, then she shouldn't get such notices. She can contact an attorney and try to sort out the matter. If the debt was solely in the name of the mother, then the heirs will not be responsible for paying anything after her death. However, her estate may be liable for paying it.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:18 | Post subject:

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