What If The Note Holder Dies And You Have The Dee?
I need to cover my basis on this scenario. I have a client, Jane Doe, who is willing to sign over the deed to her property due to financial problems. I would pay her note monthly and be on my way to lease/option the property to a 3rd party. My concern is what would happen if the note holder, Jane Doe, dies. How would the mortgage company handle such an issue? Also, what would be the best plan of action to protect the property, myself, and the tenant? Age is of concern here since the owner is over 65.
IF the noteholder dies, the note becomes part of the estate, it does not affect the mortgage you have with them as far as terms. The only thing that changes is who you pay the monthly payment to, and if the person dies at an untimely moment, it could prolong the time it gets the payoff. You may want to set up a title company or third party property management company to handle receipt of your payments to Jane Doe. It would be in your best interest, because if she dies during your loan period, you need a place to accurately record your payment history to her, while her estate is being probated. This will give you the payment history proof you need for refinance with a mortgage company, and a good third party can help expedite the payoff in that situation.