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While the personal representative did not execute the will as written (distributed the funds 3 years too early), there is not likely to be any sufficient cause of action here. The proper beneficiary received the funds, there was no misappropriation of funds, and the funds were properly accounted for.
Your daughter could raise an issue with the probate court, but any damages here would be extraordinarily limited (if any, of which I am doubtful).
If the mortgage borrower default on the loan, the lender is going to foreclose the mortgage. I presume that you already know that, so it is unclear as to what you mean by "how does the lender deal with a borrower etc.…"If you can clarify your question a little further I'm sure I can assist you with pertinent information.
My apologies for the above, it appears that there was an error in the forum's server with another expert's conversation crossing over into ours.