Estate Law Questions? Ask an Estate Lawyer.
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Good afternoon. This is usually addressed in the mortgage documents. Usually the death of a party to the loan requires notice to the lender and the lender then has the right to either call the loan or waive the right to accelerate. If they choose the latter, they will either release the estate from further liability or require some kind of collateral be posted by the estate. The death does not automatically release the co-signer and the executor of the estate cannot distribute estate assets to the beneficiaries of the estate until the issue has been resolved with the lender. And, the lender's final determination will be based on the loan to value of the property ratio, the payment history, and the financial strength of the surviving borrowers.
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Thanks for allowing meto be of service to you. Please be aware that the information provided here isnot legal advice. Rather it is simply general information. All states have intricacies in their lawsand any information given is simply information only and specifically is notintended to be, nor does it constitute, legal advice. This communication doesnot establish an attorney-client relationship with you. I hope this answer has been helpful to you.
Thanks for the additional information. You would not have any liability. And, how the lender dealt with estate assets would depend upon the situation with the loan amount versus the home's value and his son's financial strength. If there was good equity in the home ...i.e, the value was much greater than what was owed...and his son had a good credit rating and a good financial statement, then it's likely the lender would simply release the estate and let his son continue on the loan alone. But, if either of the foregoing was at issue, the lender would likely call the loan and force his son to either refinance or sell the house. If there were a deficiency, your husband's estate would be at risk for any shortfall; if the son needed to refinance, you could make an independent decision as to whether or not to help him.
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