Legal Question in Real Estate Law in Maryland

First, stay current on the mortgage payments. The death of the owner does not eliminate the mortgage or provide any relief from the requirement to pay. (If the house is foreclosed on and there is a deficiency, the lender won't be able to sue anyone for it, but that does not matter if the goal is to save the house).

If payments are behind and the family or estate can't get caught up quickly, it may be possible for an heir (even if a child) to file bankruptcy to allow the arrears to be cured over time. We have filed bankruptcy cases for children in just this situation.

If there is no will, in Maryland the house passes to the probate estate, and the assets of the estate (after certain family allowances) pass first to any creditors of the decedent, and then to the legal heirs (subject also to certain taxes). The Orphans Court and Register of Wills will supervise this process through appointment of a family member (or a creditor, if no family member steps up) as personal representative. After taking care of creditors and taxes, if necessary, the personal representative will transfer the property to the heirs.

Who the heirs are depends on what close relatives survive. If there is a spouse and minor children, the spouse gets half and the children together get half (spouse gets the first $15000 if the children are all adults, before dividing the rest). If there are children (minors or adults) and no spouse, the children get everything.

You should consult with an experienced attorney to help shepherd the family through this difficult time, and do what is necessary and proper to try to save the home for the family.

If you look at the terms of your mortgage (Deed of Trust), it will almost always say that the mortgage must get paid off before any transfer takes place. Although a lender is unlikely to immediately call the note due if the mortgage is being paid on time, one must eventually deal with this fact. The law requires that estates be disbursed in a timely fashion, so one cannot ignore this and keep the property in the deceased's name indefinitely - instead the property will need to be transferred, either to the heirs (if there is enough money to pay off debt) or to a third party buyer.

At the end of the day, the heirs will either need to ASSUME the mortgage (that is, get the lender's permission to legally take over the mortgage); REFINANCE / PURCHASE with a new loan in the new owner(s)' name or SELL the property and pay off the current loan. In any of these three options, there should be a new deed conveying the property from the estate to the ultimate owner.

As the other attorney correctly noted, the law says who gets any assets if someone dies without a will. The house now belongs to the estate and the Personal Representative will need to do one of the three options described above.

While I hope this general legal information helps, it doesn't take the place of an attorney/client relationship. You may wish to seek legal counsel to assist with the estate and related issues.