What to do if my late mom’s house was left to my niece in her Will but my niece can’t afford the mortgage and is unable to refinance it?

Mom passed away 2 1/2 years ago. There are no assets in the estate. The Will has been probated and I am the executor. The house has a $40,000 mortgage and is still in my mom’s name. My niece is unable to pay/refinance the mortgage. My sister and I have been paying the mortgage to help our niece thinking at some point she would be able to refinance but that is not going to happen. Therefore, we need to get rid of the house. I doubt that Fannie Mae will “take back the house” since it is not in good shape and therefore we plan to just stop making payments and foreclose. My biggest concern is that that process may hurt my credit. Will it? Other ideas?

Asked on June 24, 2014 under Estate Planning, Alabama


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Your niece could have disclaimed her inheritance but there are time limitations as to same and I would double check that. Then you as executor can do what is necessary top get rid of the asset.  You can ask about a deed in lieu of foreclosure or try and see if you can negotiate the bank to allow you to do a short sale.  Just make sure that they waive the deficiency either way. I would not just ket it go in to foreclosure as that can be seen as a breach of fiduciary duty. Good luck.

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