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What happens to mortgage if a spouse on the loan dies?

Hello,
My wife and I have both our names on the mortgage. She passed away last year from cancer. Both of our names are still on the mortgage. I've transferred the house into my name. If I let the lender know that my wife passed away what happens to the mortgage? I'm unemployed right now and going back to school to get a masters degree. I actually have enough savings to pay off the loan but, that would take all of my savings.
Thanks so much for your help

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi voodoochild,

As you have changed the title to your name, if you inform the lender about your wife's death, they can ask for the balance amount of the loan. The other option you have is to [url=http://www.mortgagefit.com/refinance.html]refinance[/url] the loan only in your name. However as you are not employed at present, they might decline to refinance it and ask you to pay off the outstanding loan.

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi voodoochild

In order to transfer the mortgage in your name, you will have to refinance it or go for a [url=http://www.mortgagefit.com/know-how/novation-mtg.html]novation[/url]. As you are unemployed, I don't think the lender would be ready to refinance the mortgage in your name. You can contact the lender and apply for a novation. It would be the lender's discretion whether he would accept it or not.

Thanks.

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

nonsense - advising the lender that your wife has passed isn't going to cause them to accelerate the loan! simply continue to make payments and you'll be fine. you don't need to refinance, you don't need novation(!) and you don't need to do anything at all.

this is not a discretionary thing at all...lenders don't require surviving spouses to refinance, sell, payoff, etc. they don't even worry about it unless and until you become delinquent on the loan. then and only then ought you to think about doing anything.

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

Thanks for the replies and helping ease my mind. I have one more question:

I would like to take advantage of the Obama mortgage plan. The loan is held with Fannie Mae, I have an 800+ credit score, my current loan is a 5.5% 30yr with about 26 years left and I when we bought we put 50% down. I was hoping that I could get Countrywide to just change the rate. Get it down to below 5%. Because of my hardship it would seem I'm one of the few prudent folks who really could use a break here.
Thanks again

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

all the details aren't complete yet, but i'd say go for it! you've obviously got a difficult situation with unemployment staring you in the face.

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

We live in Nevada a community property state. My husband purchase our home after we were married, but since I do not work, he purchased in his name only - then he transferred title to a trust to safe guard his childrens interest in the home, making his son sucessor trustee. What can I do to secure my home, and not be forced to sell so his adult children can receive whatever proceeds we could get in this down market. Do I have any other options?

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jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Juanita,

As you are in a community property state, you should be entitled to a certain portion of the property through the Moore Marsden Rule. So, i believe, when the property is sold off, you will get a certain part of the sale proceeds.

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

i need to know what can my mom do, she is on the deed but not on the loan, my father who has passed is now not on the deed? what can she do

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

elaine, if there's a mortgage on the home, all your Mom need do is to continue to pay that mortgage. the lender won't care about that as long as payments are made. her ownership, of course, is not an issue, as you mentioned.

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

My mom just passed away and she was the only one on the morgtage. My dad wants to put it in his name but they wont refinance cause the house wont appraise for what is owed. What can my dad do?

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savior70's picture
savior70 | Joined: March 25, 2009 05:14 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi

The best way I think is to simply continue making payments and pay off the mortgage. As long as you keep making the payments, the lender will not mind who is on the loan and who is not. You can also ask the lender uf they can add your dad to the loan through a simple Novation agreement.

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