What happens to house in foreclosure when someone dies?

Forest
My mother died and did not make specific bequest for condo as it is going into foreclosure. It was refinanced 2 years ago with a negative amortization loan. The loan is due to recast and none of her children can take over the loan. She was "upside down" and in this housing market (in Las Vegas) there is no chance of selling. If the foreclosure proceeds, how will this affect the surviving children? Can they be held responsible?

Hassie
There is a "Notice to Creditors" period for probate. The debt falls onto the estate, not you other siblings. If your mother's estate has a probate attorney, he can advise you on this.Hopefully, there won't be a deficiency judgement which eats up any remaining estate assets. If so, her estate will be insolvent or not have assets sufficient to cover all the estate debt. http://bdstlaw.com/Probate.html

Joline
This can be tricky. First and foremost, as to the home itself, unless any of the kin were part of the original contract, then all her heirs are free from the property. So if it forecloses, the only one that owes on it is her. But since she is deceased (I'm sorry for your loss) no one pays. However, with that said, if she has any assets, that goes to the mortgage company to make up for any shortfall between the sell-price and the mortgage pay-off amount. So, if she was upside down on the loan, her assets will go to pay off this amount. This can be avoided if she had her assets transferred before her passing or if they're wrapped up in probate somehow. I would suggest talking to a probate lawyer in regards to any assets she left.However, if she had no assets to speak of after passing, then the surviving family is safe from any collection efforts by the bank.

Kandi
I am asked this often; ONLY thoseparties that are "signatory" to a contract are responsible for itsconclusion [or performance]Thus, you have no obligation neitherdo any of your siblings.sorry for your loss.[if mom did have any assets that you are not sure of...and you want them, make sure you get the estateprobated by the court.] IF you aresure she left nothing, enjoyher otherwise, great legacy!

Corine
It becomes part of her estate. I would talk with an lawyer ASAP to see if there is any way to contain this and save any other assets of the estate.If she didn't have any assets (life insurance, other major assets) then the estate can't pay it out and they can't come after the heirs. The case is closed. Same as with credit cards and other debts.

Macie
It might sell, you might be surprised... they only need to get what is owed on it. No, after it foreclosures it's the bank problem, not yours.

Blossom
If she was the only one on the loan papers, no one else has anything to worry about. If someone co-signed with her, they will have a forclosure on their record.