Loan modification options for heirs inheriting mortgages
If a loved one has died and left his or her home to you, the gesture may seem overwhelming for numerous reasons. First, you may be struggling with the emotional elements of this kind of gesture. Second, you may be questioning whether you will keep the house or sell it. In either case, you may be suddenly faced with paying off months of mortgage payments until the house sells or years of payments until the mortgage is fully paid off.
Thankfully, new guidelines that were issued last month will help you to make these decisions and seek a mortgage loan modification when necessary without undue threat of the bank foreclosing on your inherited property. The Consumer Financial Protection Bureau (CFPB) created these guidelines in response to numerous complaints from survivors who have been having difficulties getting servicers to work with them in regards to inherited mortgages and loans to property in which they have some sort of claim.
The frustrations that survivors have been facing in regards to this issue are unacceptable. The CFPB's assistant director for the office of regulations recently explained that the agency was compelled to act after receiving, "Concerns about servicers refusing to talk to family members, or demanding documents that basically didn't exist." In addition, servicers have been losing documentation and requesting other documentation multiple times before its receipt is recognized.
The new guidelines will help to ensure that receivers respond promptly to communications made by survivors and more fairly determine loan modification eligibility. However, even a reformed system is unlikely to work perfectly. If you or your loved ones are struggling to modify an inherited property loan, please contact an experienced attorney who can help you navigate the new guidelines and any relevant legal options available to you.
Source: New York Times, "Guidelines Help Heirs Assume and Modify Loans," Lisa Prevost, Nov. 14, 2013