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No or not directly. The loan was between the borrower and the lender with the property pledged as security. If the surviving tenant doesn't want the note foreclosed and the house auctioned by the lender to pay off the outstanding loan then the surviving tenant needs to take action.

The simple method that will work in many cases is to just make the payments on time. Legally you are not required to do so and the lender might technically have the right to call the loan due if you are not on the loan. If the payments are made on time the lender has little incentive to take action.

Or the property can be sold and the loan paid off. Or the owner can obtain a new loan and pay off the old loan. Or the owner can use savings to pay off the loan.

The loan will have a lien that is attached to the property even after the person dies so something must be done to remove the lien or otherwise address the monthly payments.

Clarification

The first important factor is that one joint tenant cannot encumber the whole property. They can only encumber their own half interest in the property. Therefore, in the case of a default on a mortgage executed by only one and depending on state laws, the lender could not take possession of the property by foreclosure- only the half interest that was mortgaged. The situation would be handled differently in different states under the lien theory/title theory of mortgages. You need to consult with an attorney in your jurisdiction who is familiar with the laws in your particular state.

Generally: In some states the granting of a mortgage by one joint tenant would break the joint tenancy and the mortgage would survive on a half interest. However, in other states a mortgage doesn't affect the joint tenancy and the right of survivorship remains intact. The results in title theory states can vary. In lien theory states, the mortgage would be extinguished upon the death of the mortgagor and the Survivor would take the property free of the mortgage.

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12y ago
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11y ago

When you purchased the house the non mortgage spouse would have been forced to sign a document that gave the bank first dibs on the house should the signer of the mortgage fail to pay it off.

so, while the bank might not be able to force you to pay them, they could take the home and sell it at auction giving you whatever is left after taxes and the bank have been satisfied. Only way this would work for the surviving spouse is if the mortgage is greater than the market value of the home.

Answer and ClarificationActually, it depends on when your name went on the deed. If your name was on the deed before the mortgage was granted then the bank can only foreclose on the co-owner's interest if you didn't sign the mortgage. This has become a practice in some states (allowing only one owner to sign the mortgage) although it can cause problems in the event of a default. In order for the lender to have their interest in the mortgaged real estate perfected, all the owners must sign the note and mortgage. Generally, if you own an interest in real property and don't sign the mortgage, the bank cannot foreclose on your interest in the case of a default since YOU did not transfer your interest to the bank.

If your name was added by deed after the mortgage was executed then your interest in the property is subject to the mortgage. Also, changing the names on a deed for property that is subject to a mortgage may trigger the due on transfer clause. Most mortgages carry boilerplate language that provides if the property is transferred the lender can demand full payment of the mortgage.

Many lenders during the sub-prime lending frenzy wrote mortgages without having all the owners sign. In that case the lender does not have full interest- only the interest of the person who signed the mortgage. Unscrupulous lenders are only interested in collecting the high fees and costs associated with the initial transaction. They aren't concerned with good title if the borrower defaults since the loans are sold soon after the transaction.

An attorney should always be consulted when making changes in the title to real estate. There are many lenders who break the rules in order to sell the loan.

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Q: If only one spouse is listed on mortgage but both are on the title and the spouse on the title dies is the surviving spouse responsible for the mortgage?
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