Posted on: 18th Mar, 2009 11:48 am
My sister's husband died recently. Both names are on deed and title, but only his on the note. The property is close to underwater. Can she walk away without liability?
yes and no. since she's not obligated on the loan note, she need not make payments. as an owner, however, she would have made promises concerning the property. also, as an owner, if the lender begins a foreclosure action, she'd be named as defendant. the public record of foreclosure will appear her credit. this may or may not persuade her to do anything.
Is there any way for her to leave without damaging her credit severely? I have spoken with the mortgage company and they emphatically state she is not on the mortgage. Does the answer vary state to state?
any foreclosure action is taken against anyone who is an owner of the property - it wouldn't matter where that property is located. i understand what the bank is telling you; they are only discussing the loan itself, of course.