What To Do When A Borrower Passes Away
When a borrower passes away, if they’re still holding a mortgage, communication is of the upmost importance.
Now, we’re not talking about pulling out the Ouija boards here… What we’re trying to say is the family of the borrower who passed away or their mortgage broker, should inform the lender of the borrower’s passing as soon as possible.
Basically: communicate soon, fully, and often.
And having a plan prepared for when you talk to the mortgage lender is also very important. A well-prepared plan will give the lender confidence to continue to work with the family.
Before speaking with the lender be sure you have answers for the following:
- Plans for the property; keeping up the payments, insurance and property taxes, transferring or selling the property
- Plans to pay out the mortgage and if there is life insurance, etc.
And lastly, don’t be afraid of full disclosure with the lender. If there isn’t enough money in the estate to keep making payments, or the property condition has deteriorated, or if there are problematic tenants on the property – let the lender know.
Interestingly enough, it is sometimes months or even years before the lender finds out that a borrower has passed away. This is often because the mortgage payments continue to be made.
The lender would rather work with the family right after the passing to figure out any solutions that may be required. This way they won’t be surprised later if things are not what they thought they were.
And as always, be sure to contact the experts at Kokanee Mortgage with any of your lending questions. We are always at the ready to pass on our industry knowledge to help in any way we can. Our decades of lending experience has given us the knowledge to help in a wide variety of situations.
