Legal Question in Real Estate Law in North Carolina

Can a mortgage company charge attorney fees for a loan that went into foreclosure (due to the loan holder passing away without a will) without informing the executive of the estate about the charges once getting the loan out of foreclosure?

Asked on 4/29/14, 10:20 am

2 Answers from Attorneys

Why did the mortgage company have to notify the executor here? It is the executor's job, upon appointment, to figure out what the deceased owned and owed. The mortgage company would have sent notices to the deceased. Where was the mail going? Who was to inherit the real property? Why weren't arrangements made to pay the mortgage?

Foreclosure does not happen for 3 or 4 months at the earliest when a mortgage is delinquent. This was more than enough time for the personal representative to be appointed and to send notice to the mortgage company.

And title to real property vests in the heirs as of the moment of death. If there was no will, then the heir to the real property should have notified the mortgage company. Heirs inherit real property subject to any existing mortgages. If the heir wanted the home then the heir should have started paying the mortgage. Otherwise the executor should have notified the mortgage company and worked out an arrangement with the heir to try and sell the home if it had equity and the estate needed the funds. Either way, I don't think the burden is on the mortgage company. Who is in the best position to know of the death? It would be the heirs and executor not the mortgage company.

There is no excuse here for the executor and heir doing nothing and allowing the home to go in foreclosure.

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Answered on 4/29/14, 10:17 pm
James Weeks Law Office of James B Weeks

yes, Executor had a duty to determine assets and liabilities of the Estate

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Answered on 5/01/14, 2:50 am

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