[WSBAPT] Transfer of Mortgage

[John Creahan]

Brent,
Under Garn St. Germain, which applies even if there is no will, due on sale clauses are unenforceable with regard to transfers to a relative resulting from the death of a borrower or where the spouse or children of the borrower become an owner of the property.
I think there are a couple of ways to achieve this. The easiest would be a disclaimer by the parents, which would only work if the wife became the alternate beneficiary.
A TEDRA agreement could also work, but is riskier in that the bank could potentially argue that it was ineffective.
Finally, the parents could assign their interest in the house to the wife, allowing the PR to distribute the house directly to the surviving spouse. In my opinion, that would fall squarely within the “spouse becomes an owner of the property” provision.
Hope this helps,
John

John Creahan
www.cairn-law.com<http://www.cairn-law.com/>
Now located in the heart of Fremont
3417 Evanston Ave. N, Suite 312
Seattle, WA 98103
206-578-5877


From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Brent Williams-Ruth
Sent: Tuesday, July 11, 2017 10:48 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Transfer of Mortgage

Thank you. No  sadly, the will in place named his parents as beneficiary as they had been married only a shorter period of time and had been actively deployed. He passed suddenly while they were meeting with JBLM office to re-write the will leaving everything to his wife.

The parents have been amazing and are working to get everything to stay with his wife with as little tax consequence as possible.

Appreciate all the help!

Brent

On Tue, Jul 11, 2017 at 10:33 AM, Mary Stone <mlstone at rockisland.com<mailto:mlstone at rockisland.com>> wrote:
Did the husband have a will, leaving the real estate to his wife?  If so, the Garn St. Germain Act says that the lender cannot invoke the ‘due-on-sale’ clause.  They must continue to accept payments from the wife.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>] On Behalf Of Brent Williams-Ruth
Sent: Tuesday, July 11, 2017 8:41 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Transfer of Mortgage

Good Morning List -

I am in the middle of a probate matter where there is real property with a mortgage and a surviving spouse - but a minuscule community property interest.  The house and mortgage were acquired 10+ years before the relationship and marriage so the surviving spouse is not on either the title or the mortgage.

Given that this is my first probate where there is still an outstanding mortgage obligation and am needing some advice/tips as when the surviving spouse originally went to the bank after death they advised her that they would replace her name on the mortgage. That sounded too good to be true when she told me about that and I advised her to make another visit.  On the next visit that happened this week, she was told she would be required to refinance and pay all the associated charges and fees.

I'm not sure whether that (refinance) is the only answer, or if I just need to speak with someone different that who she was talking with.

​Appreciate the assistance.

Thank you,
Brent​

--

Brent Williams-Ruth
Founding Member

BWR Consulting, PLLC

Phone: (425) 830-5134<tel:(425)%20830-5134>

e-mail<mailto:brent at bwrconsults.com> / website<http://www.bwrconsults.com> / facebook<http://www.facebook.com/bwrconsults>

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--

Brent Williams-Ruth
Founding Member

BWR Consulting, PLLC

Phone: (425) 830-5134

e-mail<mailto:brent at bwrconsults.com> / website<http://www.bwrconsults.com> / facebook<http://www.facebook.com/bwrconsults>
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