Foreclosure Lawsuit After a Loved One’s Passing
When your grandmother passed away, her townhouse passed to her heirs. Depending on the circumstances, you could be one of her heirs and potentially have an interest in her property.
What Happens When a Mortgage Lender Files a Foreclosure Lawsuit?
Because her mortgage is not getting paid, her mortgage lender filed a foreclosure lawsuit and has identified you as a potential heir. In a foreclosure suit, the lender will have to name everyone with even a potential interest in the property and “foreclose” their ownership interest in the property. It does this to get a “marketable” title to the property so it can sell it and recoup the money it lent your grandmother.
What Does This Mean for You?
Even though you are not the borrower and did not sign the paperwork, you were included in the lawsuit due to your potential ownership interest as an heir. Because you are just an heir and not the borrower, the lender can only take back any ownership interest in the property you may have — it cannot get any money from you. In fact, if the property has any equity, you may even be able to get some money from it.
What Are Your Options?
You may be able to sell the property, pay off the bank, and keep the remainder. However, this may require you to probate your grandmother’s estate and cooperate with any other heirs. Even if doing all of that is not feasible in your circumstance, if the lender is outbid at the foreclosure sale, you and any other heirs can claim the extra funds from the process, known as the “surplus.”
What Should You Do?
You should be concerned any time you are served a lawsuit or sent any legal papers. Lawsuits are time-sensitive, and you should consult an experienced local attorney to review the lawsuit and learn about your rights and obligations.
Conclusion
If you have been served with a foreclosure lawsuit and are unsure of what to do, it is essential to seek the advice of an experienced attorney. They can help you navigate the legal process and protect your rights as an heir to your grandmother’s property.
FAQs
Q: Why was I included in the foreclosure lawsuit if I didn’t sign the mortgage paperwork?
A: You were included in the lawsuit because you are an heir to your grandmother’s property and have a potential ownership interest in the property.
Q: Can the lender get money from me?
A: No, the lender cannot get any money from you as an heir. You are not the borrower, and the lender can only take back any ownership interest in the property you may have.
Q: What happens if the property has equity?
A: If the property has equity, you may be able to get some money from it. You may be able to sell the property, pay off the bank, and keep the remainder.
Q: What is the surplus, and how can I claim it?
A: The surplus is the extra funds left over after the foreclosure sale. If the lender is outbid at the foreclosure sale, you and any other heirs can claim the surplus.
