The death of a spouse brings with it a lot madness and fear of surviving spouses. As an instance, wives who lose their husbands may wonder what will become of their home’s mortgage, especially if it was from the husband’s name only. A surviving spouse considering a mortgage in the deceased spouse’s title simply can take some solace. A 1982 federal law permits a surviving spouse to take on the mortgage left behind by the deceased spouse.
Surviving Spouse Rights
A mortgage’s due-on-sale clause normally enables lenders to call from their mortgages when debtors pass out. On the other hand, the Garn-St. Germain Depository Institutions Act of 1982 prohibits lenders from calling in their deceased borrowers’ mortgages under certain conditions. One example in which a lender can not call in a deceased debtor’s mortgage is whenever there’s a surviving spouse. Underneath Garn-St. Germain, a surviving spouse generally has a right to undertake the mortgage left behind from the deceased spouse in 2 scenarios.
Surviving Joint Tenants
Husbands and wives normally take title to their homes with what the law calls “joint tenants” or “joint tenancies.” Garn-St. Germain bars mortgage lenders from calling their loans when a surviving joint tenant, like a spouse, is involved. Surviving spouses in a joint tenancy property ownership situation are free to assume the mortgages on their homes, in other words. Beware of attempts by unscrupulous mortgage lenders trying to charge assumption fees in surviving joint tenant instances.
Inheriting a Mortgage
Relatives of dead mortgage borrowers inheriting those borrowers’ homes are permitted to keep those homes’ mortgages as well. Garn-St. Germain even enables relatives inheriting mortgaged homes to keep those homes’ mortgages in the deceased borrowers’ names. Fundamentally, surviving spouses that are left mortgaged homes by deceased spouses have the right to pay on their deceased spouses’ mortgages without fear of foreclosure. Surviving relatives must live in the mortgaged homes left them with their dead relatives to take on these mortgages, though.
There have been instances where mortgage companies have tried to foreclose mortgages even if surviving spouses or joint tenants are involved. Usually, though, mortgage lenders are far more worried about receiving mortgage payments than going via a foreclosure. Generally speaking, mortgage lenders are aware of the regulations contained within Garn-St. Germain and mortgage due-on-sale clause preemption. Finally, surviving spouses still must educate mortgage lenders of their aim to take over their dead spouses’ mortgages as soon as possible.