As Ohio’s experienced foreclosure lawyer will tell you, mortgages are secured loans tied to an asset – a house – and a borrower. If that person happens to pass away, the lender won’t just write off the debt obligation. Someone still has to make those mortgage payments.

Has your loved one passed away before paying off their full mortgage? If the person’s estate does not meet the terms of that loan, the lender will start the foreclosure process, but what happens if a house goes into foreclosure during probate? If you have estate executor responsibilities, this is an especially important question.

Does the estate’s executor have foreclosure rights they can reference? Let’s take a look.

Can a Bank Start Foreclosure on Property in Probate?

Yes, banks can start foreclosure if the house, apartment, condo, or land is in probate. As the mortgage lender, a bank will want to use the sale of the attached house to get back their money. 

First, the bank will show it has a right to foreclose on the property. This proof will be in the loan terms the deceased and the lender agreed to and signed. In many cases, probate will not stop this foreclosure process, but it is important to understand your rights as an estate executor alongside the bank’s rights.

What Happens When the Bank Forecloses on Property in Probate?

What usually happens if a house goes into foreclosure during probate? The bank sells the house at auction, securing less than market value. If it ends up being enough to meet the loan’s terms, the bank will then pay the estate any profit from the sale.

There are two types of foreclosure – judicial and nonjudicial.

• Judicial foreclosure means the bank reserves the right to recoup any remaining balance on the loan after the sale of the property.
• Nonjudicial foreclosure means the bank can only recover the property sale amount.

How Can I Stop Foreclosure on a House During Probate?

What happens if a house goes into foreclosure during probate? Has the foreclosure process already started? If it hasn’t, here’s how you may be able to stop it.

Pay the Mortgage

An effective method for avoiding foreclosure might sound obvious, but paying the mortgage with funds from the estate should stop the process. It’s important to notify the lender that the loan holder has passed away and ask for any current loan documents.

Request an Injunction

Does the estate lack liquid assets? You may want to request an injunction that will allow you to:

• Sell the property within a reasonable timeframe.
• Liquidate other estate assets, such as cars, boats, or other real estate.

Speak With a Foreclosure Attorney

So, now you know what happens if a house goes into foreclosure during probate and ways to circumvent this. Hiring a foreclosure attorney can also be helpful in making educated decisions and having support through the process, including preventing foreclosure at the right time.

Has the probate process become a headache? Cozmyk Law Offices in Independence, OH, is available to help. Call us at 877-570-4440 or fill out our online form for a FREE consultation.