How to Handle Deceased Parent's House Mortgage?

[Waldo P. Emerson-Jones]

A friend asked me to post this question.

A parent recently passed away. For her parent's house, she is on the deed but not the mortgage. She plans to sell the house in the near future. The mortgage company said she should provide a death certificate, the will and start the process to assume the note. However, she is concerned about qualifying because she is self-employed and probably doesn't have enough visible income although her credit score is good. She plans to make the payments regardless until she can sell the house but that could take several months.

So, does she need to assume the mortgage in order to sell the house? What happens if she applies to assume the loan but does not qualify because of lack of reported income? Does there need to be some sort of probate proceeding to sell the house even though she's on the deed? What's the best way to handle this situation? FWIW, she and the house are in Texas.

[instfixer]

You need a lawyer!

TO get a lawyer that will not likely rip you off

Find a Real Estate agent who been in the business a long time---then ask them Who their lawyer is. Many times in buying or selling a house a lawyer is needed.

Then when you make contact say Mr/Ms Real Estate agent recommended you
They will not likely rip you off because they have an on going long term relationship [$$] going with the agent and they would be foolish to jeopardize that.

I have been there

I had to fire a crooked incompetent lawyer dealing with my father's estate and got a good honest lawyer via the method I just described

A lawyer is your interface between you and the legal system

[Rocky]

Instfixer is correct to recommend a Lawyer. However...

I had to settle some family affairs and from my experience, the First Lawyer they may want to contact would be an "Estate Lawyer". The Disposition of the parents' estate may need to happen first. The type of estate plan ie; Living Trust, Will or lack there of may predetermine how the Real Estate should be "Legally" handled. There also may be known or unknown Creditors with Liens/Claims to the "Estate".

Just because a person is added to the Title of a piece of Real Property doesn't automatically mean that person can just go out and sell the property without opening themselves up to legal consequences especially if there are other interested parties to the "Estate".

In regard to the Mortgage. It would depend on the type of Mortgage. Most mortgage loans originated in the last decade contained terms which made them Non-assumable. Some Government loans were assumable but not a ton. If the Loan was non-assumable the applicant would need to qualify on their own using full documentation of Income, Employment and assets.

[PhantomofTheOpera]

Rocky is pretty much on target. I will add that the key points are the OP’s friend needs to get with a board certified Estate/Probate attorney first while continuing to make the loan payments. This avoids having the loan go into default which is the start of the foreclosure process. Under no circumstances should the OP’S friend send the mortgage company anything except the payments. Let the retained counsel deal with sending any legal documents to the mortgage company.

Now for the assumable part of the loan, most loans do have the non-assumable language unless the note was a VA loan, which is fully assumable. The OP’s friend will need to be able to tell the difference but that should be easy to do.

As for finding competent counsel, most major cities have attorney referral services that the friend can call if they are not knowledgeable of what attorney to call. If they are unsure of what to do, this link provides the best first step in their journey: http://www.texasbar.com/lris/ in finding a competent attorney to represent them.

Good luck.

[houston_switch]

I would think the Estate needs to go through Probate... You need legal help certified in estates. If you are in Hiuston area, PM me and I can make recommendations.
h_s