Inherited a Home? You May Not Have to Refinance the Mortgage

People who inherit a home may have the right to keep its existing mortgage instead of refinancing into a new loan. But some mortgage servicers have reportedly made that process difficult, potentially exposing heirs to higher payments, delays, and even foreclosure risk. Tim Lucas and Craig Berry explain the protections available under federal law, the problems some homeowners have reported, and what heirs can do if a servicer stands in the way.

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In this episode you'll learn:

• Why heirs may not need to refinance: Federal law can allow certain people who inherit or receive a home to assume the existing mortgage rather than replace it with a new loan.
• Who may be protected: The rules can apply to surviving spouses, children, people awarded a home through divorce, and certain other successors in interest.
• Why refinancing can be costly: Replacing an older low-rate mortgage with a new loan at today’s rates could significantly increase the monthly payment.
• What homeowners have reported: Consumer complaints include being denied access to mortgage accounts, having payments blocked, and being asked repeatedly for the same documentation.
• Why servicing delays can become dangerous: Long processing times can contribute to missed payments, legal expenses, delinquency, and potentially foreclosure.
• How divorce cases can become complicated: A servicer’s refusal to release a former borrower from liability can create financial and legal problems even after ownership has changed.
• Why domestic violence survivors may face added risks: Some servicing practices can expose account information or require involvement from an abusive former partner.
• What documentation heirs may need: Depending on the circumstances, servicers may request records such as a death certificate, will, or court order to establish the new owner’s rights.
• Why keeping detailed records matters: Saving copies of documents, communications, and attempted payments can help establish what happened if a dispute needs to be escalated.
• The big takeaway: Inheriting a home does not automatically mean refinancing its mortgage. People who believe a servicer is improperly blocking an assumption should understand their rights, document their efforts carefully, and consider legal help if their home is at risk.

Read the full article: https://www.mortgageresearch.com/articles/mortgage-servicers-pressure-heirs-to-refinance/