What are the rights of heirship when an owner dies without a Will and there is a mortgage lien against the property?

Owner is divorced; there are 3 heirs.

Asked on November 12, 2015 under Estate Planning, Arkansas


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Typically, when a mortgaged property changes ownership, the mortgage lender has the right to demand payment if full of the mortgage balance. This because of what is known as a "due on sale" clause whih allows the lender to call the mortgage due if the home becomes titled in another person's name.
However, the law is different when a home that is mortgaged is inherited. In that event, the person (or persons) who inherits gets the property and takes the loan over; the lender can't call the mortgage due as long the monthly payments are made on time.

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