I am the only name on my home mortgage. If I pass before the mortgage is paid off, can the bank take possession of my home?

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Set up a family trust for us in 2003, and it was revised earlier this year after my wife passed.


My in-laws tell me that I should get my daughter's name put on the mortgage because of what happened to one of their friends.


One of the spouses passed several years ago. The surviving spouse passed, and when their children went to remove their parents' belongings, they could not enter the house because the bank had changed the locks.


The bank informed the children that the house now belonged to the bank because the parents' names were the only ones on the mortgage. Since they were now both deceased, the bank took possession.


My question is:


Does the Family Trust that you set up for my [ deceased ] wife and I protect my children from a situation as described above ?


John

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You have been given very solid advice from Garden & Freqflyer.

I'd bet the executor of the estate did not pay the mortgage so it got foreclosed on; or did not work out a due-on-transfer clause that most mortgages have to deal with mortgagee death. If the house was underwater on the mortgage, this probably was the best option.
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John, in order to add your daughter's name to the mortgage, it would have to be refinanced. A credit check would be done for your daughter's credit.

And, most importantly, she would be obligated to continue the mortgage payments if you died. Does she have the funds to do so?

Your in-laws' advice was wrong. Title to the house would not cede to your daughter in the event of your death if you merely refinanced and added her as a co-borrower. What would be required is a new deed, generally a Quit Claim Deed in which you quit claim to yourself and your daughter.

However, most residential mortgages that I've read could consider this a transfer of ownership, and trigger a default. You'd have to contact your lender before doing this to ensure that they're on board with the change.
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Mr. Johnson, somehow you got onto a caregiver forum. I don't know if you wish for the writers here to answer any of your questions.

The easiest answer is if a house still has a mortgage and the owner passes away, it is up to whomever inherits the house to continue to pay the mortgage payments. If that person fails to pay, the bank has a right to put the house into foreclosure.

This can also happen if there is a reverse mortgage and the remaining spouse had passed on. The bank can call the note within a month, and if the house isn't refinanced or sold, the bank can take the house.

You mentioned putting your daughter on your mortgage. That would only be possible if your daughter can qualify to be a co-signer. She probably would have to go through the mortgage application process. Would she be able to pay your mortgage monthly is you should pass?

Check with your Elder Law attorney as to the best route regarding your house.
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Admin please delete personal
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