If a property is owned subject to, and the mortgage is in the name of a deceased person, who would be foreclosed upon in the event of a default on the mortgage? The property owner? The estate of the deceased? What if the estate has been settled? Who’s credit report would get the hit?
The estate has not been settled because the loan has not been paid off. You have a really good question. I have seen the property actually given back to the lien holder by the heirs but not with a sub2. The bank should be notified of the death. I would plan on getting it refinanced as they will find a way to get possession of the property. You can not foreclose on a dead person but maybe the estate can be notified and served the default? I really do not have a clear understanding of what would happen and would learn to know the correct answer.
Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737