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What happens to a FHA loan house on death?

Posted on: 15th Nov, 2009 05:11 pm
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.
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.

Posted on: 15th Nov, 2009 07:15 pm
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.
Posted on: 15th Nov, 2009 08:32 pm
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?
Posted on: 09th Mar, 2011 02:28 pm
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.
Posted on: 09th Mar, 2011 09:15 pm
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?
Posted on: 14th Jun, 2013 02:45 pm
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.
Posted on: 16th Jun, 2013 10:21 pm
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