Sternberg Law Group


California Probate and Foreclosure


California Probate and Foreclosure

Debt doesn’t die. If you have inherited a home or property with an outstanding mortgage, it is critical that you understand how mortgage repayment works. The estate’s personal representative needs to understand how the mortgage affects the administration of the estate. Failure to make timely payments on the mortgage during the estate’s administration can result in the loss of the real property to the lender through foreclosure. While foreclosure in probate does happen all too frequently, it is absolutely possible to save a house that’s part of a probate estate from foreclosure.

Mortgage Forgiveness

There are a variety of factors that could contribute to the default of a mortgage during the administrations of an estate. One of the primary reasons is that the estate’s representative waited too long or did not ever consult an attorney specialized in this field. Working with an experienced real estate attorney like the team at Sternberg Law Group can help protect your property. Often, an estate’s representative is unaware of an outstanding mortgage, mistakenly believes a mortgage is forgiven when the borrower passes away, or does not understand the importance of paying that mortgage during the administration process. A good attorney will inform you of your options and guide you through what could otherwise be the extremely overwhelming process of probate law.

Inheriting An Estate Facing Foreclosure

The risk of foreclosure during probate administration is greater in circumstances in which the property is the only asset in the estate. In this case, there would be no other funds in the estate to pay the mortgage. Unfortunately, this is not an excuse for missing mortgage payments. In the same way that there are no exceptions under California law that mandate forgiveness of the loan due to the borrower’s death, there is also no law that allows the estate to defer payments to the lender. The bottom line is if the estate defaults on the mortgage during the period of the estate’s administration the lender can foreclose on the property.

As the heir or heirs to a property you are held responsible for all mortgage payments and should the property face foreclosure you will have to make the appropriate choices, fight to save your home, perhaps refinance or sell the property e.g. short sale. Your options have to be carefully considered and Joshua Sternberg and his team are the best in the Greater Los Angeles Area.

California Foreclosure Process

In California, the non-judicial foreclosure process is conducted pursuant to Civil Code 2924. Section 2924 authorizes the lender, in the event of default, to sell the property to satisfy the loan balance. Ideally, a conversation should take place between the estate’s representative and the lender before a notice of default is sent out. With an experienced lawyer at your side, the chances of reaching an amenable solution, such as receiving some time to come up with the mortgage money, increase. The estate representative then has a few options for coming up with the money to save the property from foreclosure. In some cases, the executor can access cash in the probate estate to bring the loan current. In others, the best solution may be to sell the property and use those funds to pay back the mortgage.

If you have inherited a house with a mortgage, you have options. By working with one of our knowledgeable attorneys at Sternberg Law Group, you can move confidently through the probate experience knowing that you have experience on your side. We will work with you to analyze your specific situation and choose the right option for you. Don’t wait, call us today to request a free consultation with one of our expert attorneys.

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