Question for Bonnap

[Deleted]

A long time ago I asked a question about a house I was inherited, you gave me the following response, which was really helpful.

"Going back to taking over my mother's mortgage without putting the loan into my name; back in the early 1980s there was a law passed called the Garn St. Germain Act. It was an important decision that has governed the assumabilty of loans. An exception to the "due on transfer" provision in most residential mortgages is if the property is inherited by a relative. So in my case (and possibly yours) I could hedge my bets by transferring the property to me but not put the loan in my name. "

Could you clarify exactly what you did with the loan. When I mentioned this to my second lawyer, she said to just keep paying on the loan and transfer the deed over to me, when the estate closes, but she seemed unsure.

I have also seen little tidbit about the loan being held by a trust, but can't find any details.

[SVT]

Unlike the old boards, there's a feature here where you can send other posters private messages, or PMs, if you wish to ask a specific poster a question. You may this posted publicly anyway and that's fine, I just wanted to mention that in case you or others weren't aware of that feature.

[Deleted]

Thanks, I'll try that.

[SVT]

It's the little envelope icon under each posters' avatar.

[Clever Username]

I'm working on a case like this.
I've got her mortgage statement right in front of me, it's addressed to: The Estate of XXYYZZ.
You may be overthinking things a bit. At their core, mortgages have only two options. Accept payments or foreclose.
Plan accordingly, if they accept payments.... you're good. If they attempt to foreclose.... you've got your defense ready.
Expect nothing, they're already overburdened with people who aren't paying their payments.

[Savoir Faire-Demogague in NJ]

Could you clarify exactly what you did with the loan. When I mentioned this to my second lawyer, she said to just keep paying on the loan and transfer the deed over to me, when the estate closes, but she seemed unsure.

You need to speak with an estate planning attorney.

[Deleted]

I answered Pooks question. Time for dinner but I'll post the link about the Garn St. Germain law later.

[Deleted]

Here's the link:

www.law.cornell.edu/uscode/12/usc_sec_12_00001701---j003-.html

You need to scroll down to d 5 to read about the transfer to a relative upon the borrower's death.

"At their core, mortgages have only two options. Accept payments or foreclose.
Plan accordingly, if they accept payments.... you're good. If they attempt to foreclose.... you've got your defense ready.
Expect nothing, they're already overburdened with people who aren't paying their payments."

Perhaps. But the lender on my deceased mother's property did say they wouldn't allow a transfer into an inter vivos trust ( it's allowed under the act) and tried to get me to assume her loan. I did not want another loan in my name. With respect to her home, I thought I might have to let it go through foreclosure. It's doesn't have great terms but it's o.k. for now.