FHA Guidelines

mortgage debt settlement and probate closure

Generally, the statute of limitation starts to run once you open the estate and give notice to creditors. For the mortgage situation, why not just list it for sale and at settlement the title clerk is required to clear title. Thus the proceeds of the sale would be used to pay off the mortgage first. Remember, no buyer will close without all current debts being cleared off the title.

If the personal representative does not report to the court, the beneficiaries can ask the court to order him or her to file an accounting or take other actions to close probate. The court can remove the personal representative and appoint someone else.Sometimes there are circumstances that can make probate take longer. If there is a Will contest (a claim filed with the court that all or part of the will is not valid), or the size and complexity of the estate requires extra time, or it is hard to find beneficiaries, the process can drag out. Some probate cases take years to resolve.  

Any estate of considerable value or titled property must go through the probate process. However, small estates with only non-titled property can just be distributed to the beneficiaries (or whoever just takes it) without going through probate, but the claims of any creditors against the estate can persist longer than they would under probate or an interested person can go to the probate and challenge the distribution, thereby forcing probate of the estate.Since probate generally takes 1 to 2 years, someone must administer the estate in the meantime and carry out the orders of the probate court.

If you and your siblings have been declared the rightful owners of the property by the courts, and if you have enough equity in the property to allow for a refinance loan, then refinancing the current mortgage on the home may be a good option to explore. If you qualify, a refinance loan could bring the delinquent loan current and end the threats of foreclosure. A refinance may also lower the interest rate and provide a longer loan term, thereby lowering your monthly loan payments, which could make it much easier for you and your brothers to keep up with the mortgage payments.

With the current tightening of the mortgage market, you may have a difficult time obtaining a refinance loan, especially if you have had past credit problems. The only way to determine whether or not you will qualify for a refinance loan is to apply for a loan with several different lenders and/or brokers. Not only will these mortgage professionals be able to tell you whether or not your currently qualify, but if you do not qualify, they can tell you what aspects of your financial situation are causing you problems, and make suggestions about how to improve your chances to qualify for a loan.

If you and your brothers find that you cannot refinance or afford the current mortgage payments on the home, you may want to consider selling the property to repay the mortgage and cash out any equity you have in the home. If you are unable to make your future mortgage payments, the lender may foreclose on your home, which could cause you to lose the equity your mother worked to build in the home. Selling the home would generally be preferable to allowing the property to go into foreclosure.

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