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J. Warren
J. Warren, Lawyer
Category: Real Estate Law
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Experience:  Experience in residential real estate and commercial leases.
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I was divorced in 2009, I was awarded the house, which I am

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I was divorced in 2009, I was awarded the house, which I am still paying for. The loan on the house was only in my ex's name, but we are in Texas (community state). He passed away in June and had remarried. The mortgage company wants a copy of his will. I have a Deed of Trust to Secure Assumption and Special Warranty Deed with Encumbrance for Owelty of Partition. When the new wife probated his will I don't think she listed this house as a debt. What will happen? Will they go after his estate for payment or make me sell?
Hello! My name is XXXXX XXXXX I look forward to helping and providing you information today.

Sorry you are dealing with this situation. In theory, yes the bank if it did not approve the assumption has the authority to file a claim against the estate. However, the reality is payments have been made and lenders are not in a hurry to get their hands on more real estate given the abundance of foreclosures.

Most likely the lender will attempt to work out a refinance with you or ratify the assumption of the mortgage pursuant to the divorce decree and let you wraparound the mortgage (assume the mortgage). Bear in mind this is a possibility and is not a given.

Another possibility is the lender invokes the due on sale clause provided for in the loan documents. If this is the case, the balance will be accelerated and called due. In this event, refinancing the house is an option and the lender is likely to work that out as well.

Hope this helps.

All my best & encouragement.

Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. If for any reason you feel that a 2 or 1 rating is appropriate, please first give me the opportunity to address your concerns.

All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.

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Customer: replied 3 years ago.

Why would the bank not go after his estate for repayment?


Thank you for the follow up question. My understanding is the loan remained in his name after the divorce and you, while transferring the title of the property to you and having an owelty lien in place did not transfer the loan into your name. Therefore, the lender may consider themselves a creditor of his estate because the original loan obligation between the bank and him was not cutoff by the divorce or subsequent deed transfer and recording. An existing contract is not terminated by a third party agreement; in the case a divorce decree.

However, as I stated, the risk is low the bank will do this as the payments have been made and they stand to make more money by either continuing the loan or working a refinance out with what has proved to be a responsible house owner and debtor.

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