Legal Question in Wills and Trusts in New York

probate

my mom passed away and her personal residence is free and clear however she has a mortgage on an investment property. The investment property is not sellable as we can't get near what she paid. We would owe the bank $150,000. if we could sell it which these units aren't selling. If we let it go to forclosure can they come after her estate and her surviving children? She lived in NY state but the investment property is in Michigan.


Asked on 1/13/09, 8:56 pm

2 Answers from Attorneys
Michael Markowitz Michael A. Markowitz, PC

Re: probate

I assume that the mortgage is in her name and not in the name of a corporation. Therefore, the short answer is yes. The bank may foreclose on the property and seek a deficiency judgment against the estate.

Mike.

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Answered on 1/14/09, 7:49 am
Walter LeVine Walter D. LeVine, Esq.

Re: probate

I agree with Mike that the estate can be sued. Perhaps, in lieu of foreclosure, the Estate can offer what is commonly known as "Deed In Lieu of Foreclosure", which is simply turning over the property to the bank, before they initiate foreclosure, to save the foreclosure time and costs. However, the real estate market being what it is today, the Bank is not required or may not accept this offer. This procedure, if accepted, can have income tax consequences, as the differential between the mortgage balance and what the property is actually worth, when ultimately sold, is considered income.

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Answered on 1/15/09, 4:17 pm


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