If I transfer my home to a church but still have a mortgage, what happens to the loan if I pass away?

Real Estate Law

Howardk06131

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If you are transferring ownership of a property to any person or entity and there is a mortgage that exists, that mortgage still remains. What matters is the wording of the mortgage. What that means is in the agreement itself it may say that if the house or property is transferred to another party, the entire mortgage will become due and payable at the time of transfer. (12 U.S.C. § 1701j-3)

You must contact the mortgage company to tell them what your plans are to see if they are agreeable with the transfer. If there is a mortgage that continues, are you intending to pay it or are you wanting the church to assume payment of the mortgage?

You do need to find out whether or not the party that you transferred to, the church, is allowed to assume the mortgage. (12 U.S.C. § 1701j-3(d)) You will still be responsible for the mortgage if the house is transferred, as you are the signer of the mortgage note regardless of the ownership of the property.

Mortgage Assignment (Assumption) Agreement

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I am transferring my home deed to my Church. What happens if I pass and there is still an outstanding mortgage on my home?

Lexi, Chatbot

I understand that transferring your home deed is a significant decision, and it's important to consider the implications. Have you already discussed this transfer with your mortgage lender?

Yes.

Lexi, Chatbot

Are there any specific terms in your mortgage agreement that you are concerned about regarding the transfer?

No, and please just answer my original question about the mortgage balance.

Howardk06131

Hello, I am Howard and an attorney here to assist you.

Great, so please answer the question I already posted!

Howardk06131

The Church will assume and if they can't pay it, they will sell the home.

Howardk06131

If you transfer it, and they immediately turn and sell the house and pay off the mortgage, that would satisfy the lender.

"Yes, that would be the plan. Thanks!"

Howardk06131

You are welcome. Just remember, regardless of the transfer of the property, you are still responsible for the mortgage. If you do intend to transfer the property and not notify the lender, you may want the church to sign an agreement that they will be responsible to pay the mortgage. If they turn and sell it quickly as you have said, then when it comes time for sale, a title company will look to pay off the existing mortgage. Again, just make sure that you’re protected from responsibility as your name is the borrower.

Howardk06131

3,365 satisfied customers

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