Legal Question in Real Estate Law in California

No. There are laws that require lenders to allow heirs to keep the deceased's loan in place as long as the heirs continue to honor the deceased's obligations under the loan. Not all of the borrower protections in mortgage lending extend to heirs, however, so what might otherwise be a curable default to the original borrower may allow the lender to accelerate the loan and demand you refinance or they will foreclose. So it is usually a good idea to refinance as soon as economically reasonable.

You don't have to refinance, as long as you can make the payments on the original promissory note. Under the Garn-St. Germain Depository Institutions Act, a lender is not permitted to exercise a due on sale clause when a transfer results from the death of a borrower and transfer is to a relative.