Losing a loved one is never easy. Neither is dealing with assets, or debts, they’ve left behind. If a parent dies, and they owe money on a home loan, what happens to the heir that inherits the home? Often, the heir will want to keep the home, and may therefore need to take over the deceased’s loan. A recent CFPB ruling makes it easier for this process to take place. While it does not require banks to adhere to the Ability-to-Pay rules for the heir, it does clarify that, “as the named borrower, the heir may more easily be able to obtain account information, pay off the loan, or seek a loan modification.”
“Losing a loved one should not mean also losing your home. Today’s interpretive rule makes it clear that when family members inherit property, they can take over the mortgage without jumping through unnecessary hoops,” said CFPB Director Richard Cordray. “This gives heirs an opportunity to work with the lender to pay off the loan or seek a loan modification.”
Read more about this on the CFPB website.