Legal Question in Real Estate Law in California

She can keep making payments, and the exact issue that you are looking for is whether her payments and his death will trigger the due on sale clause in the loan.

There are several exceptions to enforcement of a due on sale clause, which may apply. A lender may not accelerate the principal and interest on a loan secured by a deed of trust on residential real property (less than 4 units) if a transfer is from an obligor to his or her spouse as co-owner, or into an intervivos trust.

You are not clear on the title issues with respect to the loan, so the exceptions may or may not apply. They are set forth in Civil Code section 2924.6.