FHA loan obligation for surving family

by Belinda P.
(Maryland)

If my ex-husband died and had a house insured under FHA and his daughter's name was not on the house could she continue paying the mortgage and keep the house?

=====ANSWER=====

Hello Belinda,

Thank you for stopping by and leaving your question here. I always enjoy meeting new people and helping them get answers to their questions.

You have not given me many details, but I will try my best to answer your question.

First you need to know I'm not able to offer legal advice. You will need to seek professional help for an exact answer that fits with your situation.

However, with the disclaimer out of the way, let me share with you what I think will be the case.

Even though your ex-husbands daughter (she must be your step-daughter) is not on the mortgage, she may be an heir to his estate.

If he re-married and has a surviving spouse, she will become responsible for the mortgage now since she is the next of kin. If he did not marry and his daughter is the natural born heir, then she will be faced with a choice.

The obligation of the mortgage does not go away with the death of the person who signed the mortgage. It gets passed onto the estate in most cases and then the estate becomes liable.

So it gets real sticky, but his daughter may be able to continue the payments and keep the mortgage going. She should be sure and get listed on the deed in some way as the executrix of the estate.

She may also want to get the house refinanced into her name in case their are other heirs to the estate that may lay claim to it.

Again, you must seek legal advice. From the lenders point of view they just want their money. They really don't care where it comes from as long as it's not illegal funds.

Also, his daughter would not be able to get any credit points for the paying the mortgage in his name.

Depending on how old the FHA home loan is, perhaps it can be assumed. However I'm not sure of the exact dates FHA stopped issuing assumable mortgages. Seems to me it was in the late 80's. You would have to read the loan documents.

Hopefully this helps.

Kind Regards,

Jeffrey Ragan