I would assume you would want a new mortgage with a clear title. There may be liens you are not aware of. Also even though there is a quit-claim, has the estate been thru probate etc. Your attorney should have given you better information, but that could be expensive also. About how much is involved? Could there be inheritance taxes?

The deed may not be valid if the granter has died and it is not recorded depending on state law.

Make sure you have title before taking any other steps.

Here is the problem in more concrete terms. The house is worth probably $130,000 and, in three years, he mortgaged it to $124,000. He had inherited the house from my DH's father free and clear. The quitclaim deed was set up so that when the brother died, my DH would get ownership of the house.

So, at this point, why would we register the deed and become responsible for the taxes when we could get no money out of it?

As a long shot I was thinking would the mortgage co reduce the mortgage to $90,000 to avoid foreclosure (which is imminent because no one is responsible for the mortgage but the deceased)? Then we would agree to take the property and sell it and they would get $90,000 which is all they would probably get if it was sold as a foreclosure.

As it is, we take what we want out of the house, lock the doors and never come back.

So basically your contemplating just walking away from your family responsibility because you won't make any money? I can maybe see this if you would lose money you really don't have and I understand that the Detroit market is probably one of the the worst markets in the country but really - does no one have any sense of responsibility anymore? No sense of shame?

"The quitclaim deed was set up so that when the brother died, my DH would get ownership of the house."

Conditional deed deliveries are almost always invalid, though it does vary by state.

A local attorney should be able to determine if the quitclaim is valid, or if the property is part of the estate.

marys1000 -- I am not explaining myself well. My BIL inherited the house 3 years ago -- the rest of the children got cash, he got the paid-for house. The siblings did a quit claim deed to the BIL -- all he had to do was live in the house and pay the taxes -- it was his. He then set up a quit-claim deed to my DH so in the invent he died, the house (which was previously my father-in-laws) would pass to my DH.

My BIL was a sick, compulsive person who, in three years time, mortgaged the house and gambled all the money away.

The mortgages were his decision, in his name -- we actually stumbled upon them by accident on-line. We begged him to stop but he would not. He is now dead. We are not in any way responsible for his debt.

I did contact an attorney I know and he said find out what the house is worth vs. what is owed. Then decide to register the deed or let it remain in BIL's name and go to foreclosure.

I am not sure what all the comments about the validity of the quit-claim deed are about. When my FIL died the house was transfered to the three children in the same way and then the two children signed it over to the BIL.

My basic question is -- would the mortgage co (CountryWide) negotiate with the next of kin to avoid foreclosure of the home?

Stir fryi - I don't understand the legal ins and outs and hopefully others will answer your questions.
I would think that if its to CountryWide's advantage someway they would probably negotiate. I.e. getting as much as they can out of the house or perhaps getting as much as they can as quickly as they can? I would think that Country wide has some cash flow problems.
How you make the pitch may make the difference in whether they negotiate. How you make the pitch depends on how much research you can do, crunch the numbers etc. Part of the research may be trying to find the right person at CountryWide to make the pitch too as well, and that can take awhile. It seems that typically when I contact a "bureacracy" I have to talk to a lot of different people before I find one who really knows what's going on or has any authority to act.
Is the house in decent shape? A good neighborhood?

The house is in good structural shape (roof, garage, windows, furnace) -- but is full of paneling and shag carpet.

We would be willing to put some money $5,000-$7,000 into it if we would get money out of it.

"Normal" houses in that neighborhood are selling for $150,000 to $170,000.

There is a foreclosure two houses down listed for $99,000 -- so Countrywide will take at least a $30,000 hit by foreclosing on the house. My DH is calling them tomorrow to tell them BIL is dead and the mortgage will not be paid.

I am so sad this happened. I hate to lock the doors and walk away -- I hate doing that to the neighbors -- but this was my BIL's doing and you can't help someone who didn't want your help.

I should mention that their is also much credit card debt but the attorney I spoke to said they almost always write it off because it is too costly to make a claim on an estate.

there are separate issues to resolve.

the mortgage company is due their mortgage and the lien will not be removed from the home. the home is now part of your BIL estate and has to be resolved before you can record the deed. I dont see any mortgage company giving up the mortgage.

at best you could assume the mortgage but that is doubtful. your DH will NOT be responsible for the mortgage however who ever is the executor will have to resolve the estate. most likely the house will need to be sold to pay for the mortgage. if the home value is upside down to the mortgage the bank will just have to take what they can get.

if there is no will you may not be able to simply take it over. the estate will have to be probated since the house is an asset.

speak to an estate attorney to work through this.

I am curious who initiates the probate case? My feeling is we wouldn't do it because, the way it looks right now, we have no claim to the estate.

Would the mortgage co. ask the county to start a probate case?

stir fryi

the estate has an asset which is the house. depending on the state, if there is no executor and/or will, the court will assign an attorney to resolve the estate.

they will determine who should be next of kin. if there are no children the court may divide the estate within siblings or surviving parents. if no one can be found to be an executor, the state may just sell all assets to resolve any liabilities (sell the house). any remaining monies will be held by the state to be claimed by any future famiily. again speak to an attorney

If there are ANY other assets (cars?, retirement funds?, etc) most of them can be liquidated to help satisfy the mortgage.

If your brother died intestate (without a will) the states laws of intestate succession will govern who may get what.
You CAN refuse the property if it comes to that.

If the state assigns a lawyer they WILL bill for every bit of time they spend and take it from the estate.

Talk to a local attorney with probate experience about how to proceed.
Explain to him the house, its mortgage, and any other assets present.

YOU should not have to pay very much for an initial consultation (if anything). If there is ANY money in the estate you can charge the legal fees to the estate.

You will NOT be liable if the estate comes up short.

These explanations have been very helpful as this is a very confusing time. Other than the house, there are NO other assets. At this time, we believe the mortgage exceeds the value of the house (we talked to a local realtor). There is no will, no POA, no executor -- all we have is this quit-claim deed (unregistered, and probably always will be).

As a courtesy, my DH has called all the credit card companies to inform them of the death. Most have said to just fax a death cert.

We haven't yet called the mortgage company. The mortgage is currently paid up to date.

As I said, we are not responsible for any of the debt -- DH is calling as a courtesy because past due notices and phone calls are occurring.

I am still not sure who actually petitions the court to start a probate case. I don't see us doing it because it does not look like we have anything to gain.

Can anyone answer the above question?

Normally, probate of a will or administration of an intestate estate is filed by someone who expects to inherit. I don't see anyone who fits the bill in the OP's scenario.

I could see the bank foreclosing, the credit card companies writing off their debt, and that being that.

Normally, probate of a will or administration of an intestate estate is filed by someone who expects to inherit. I don't see anyone who fits the bill in the OP's scenario.

I could see the bank foreclosing, the credit card companies writing off their debt, and that being that.

Stir Fryi

your DH should not be afraid to become the executor. he will NEVER be responsible personally to pay the debt. he will just have to resolve the estate and pay any debts that are still outstanding.

i would call the mortgage company and explain what happen. they will most likely say to contact them once an executor is picked if not they will probably force a foreclosure. this will advise the court the estate needs to be probated and the court will set up an executor.

the estate should be resolved even if there is nothing left for heirs to inherit.

speak to an atty they will probably due a free consult or minimal fee to talk to you.

Thank you for all the explanations. I have spoke to an attorney last week -- at that time he said step one is find out what the house is worth vs. what is owed.

I have a much clearer understanding of what is going to happen now.