Legal Question in Insurance Law in Illinois

Mortgage insurance only provides money to the lender in the event of a default. For example, if there was a mortgage balance of $200,000, and after foreclosure, the lender only received $125,000, the mortgage insurance company would pay the lender the $75,000 shortfall.

You may be thinking of credit life insurance, which would be unusual for someone to have, mostly because it is very expensive. As her daughter or son, you might have an interest in the property. Illinois has some strict rules on foreclosing when the mortgagor is deceased. You should contact an attorney to review the situation to see if the property can be saved. Not sure I understand what they mean by the house is no longer in their hands but is being managed by a property manager. This does not exactly make sense.