Both Parents Passed, No Will

The Home has Two Mortgages on it, It’s Upside Down. Negative 100K in equity
Three Surviving Children.
Are the Children responsible to repay the Debt on the Home?
None of the Children have Legally became executor.
The Lender is sending letters Stating that We the Children are responsible to
Repay the Mortgage.

Can we just let the property go to foreclosure / sheriff sale by Doing Nothing?

Asked on May 14, 2017 under Estate Planning, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

The following answer assumes that no one other than your parents was on the mortgage or co-signed or guaranteed it; if there was some other person who signed, guaranteed, etc. the mortgage, he or she remains responsible.
The estate is responsible for the bills: the legal entity created to wind-up  the affairs of, pay the expenses/debts of, and distribute the assets of the deceased. Only the estate--this fictional legal entity--is responsible until and unless the homes are actually distributed in probate *and* the person(s) inheriting them accept them: no one can be forced to take an inheritance against his or her will. Not even the personal representative (executor or count-appointed administrator) is personally responsible for these debts. So any heirs can disclaim or decline to inherit the homes (contact the probate court for the procedure) and let the homes be foreclosed and will NOT be responsible for the mortgages. If the lender tries to tell you otherwise, explain to them that you are not on the mortgage, are not taking over the home, and have no connection to the mortgage, and that if the lender keeps pursuing you for the money, you will report them for collections fraud. (You obviously can say this very nicely and professionally, but do not be afraid let them know that you know your rights.)
The lender could sue the estate--not the heirs or personal representative--for any unpaid balance on the mortgage or shortfall after the homes are foreclosed; this means they can get money from the estate, which will reduce what the heirs inherit, if the lender does this, but that's the most they can do.

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