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What you need to know about mortgage in probate

On Behalf of | Sep 2, 2022 | Estate Planning |

When a loved one dies in California, their estate goes through probate, a process that helps to ensure that the deceased’s assets get distributed properly. One of the many tasks that must get completed during probate is handling the deceased’s mortgage.

The probate process

Usually, the probate/estate administration process starts with the filing of a petition with the court. The person who filed the petition, known as the “petitioner,” is typically the executor or administrator of the estate.

Generally speaking, though, probate involves inventorying the deceased’s assets, paying debts and taxes, and distributing the remaining assets to beneficiaries. If the deceased had a mortgage, it must be paid off before any other debts or distributions from the estate can be made.

Who is responsible for the mortgage?

In most cases, the executor of the estate is responsible for handling the deceased’s mortgage. However, there may be some exceptions to this rule. For example, if there was someone else named on the mortgage, such as a co-signer or joint borrower, that person may be responsible for the mortgage.

It’s important to note that, even if the executor is not responsible for the mortgage, they may still need to take action in order to ensure that the mortgage gets paid. For example, if the estate does not have enough money to pay off the mortgage, the executor may need to sell assets in order to come up with the necessary funds.

What happens if the mortgage isn’t paid?

If the mortgage doesn’t get paid, the lender may begin foreclosure proceedings. This means that they may attempt to collect the balance of the loan from the estate. If this is not possible, they may ultimately foreclose on the property. Of course, this is a worst-case scenario and, as long as the executor takes action in a timely manner, it can be avoided.

If you find yourself in the position of handling a mortgage during probate, make sure that you understand the probate process and your role in it. Once you have a clear understanding of what’s expected of you, take action to ensure that the mortgage is paid to avoid problems while the estate is being settled.