[WSBAPT] Unmarried partner inheriting real property - mortgage terms

Wed Jul 6 12:48:31 PDT 2022

In re Earls, 164 Wn. App. 447 deals with this issue to some degree.  Holds that claims must be filed for contingent liabilities—in that case a lease guarantee—and discusses a prior case involving mortgages.

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Brent Williams-Ruth
Sent: Thursday, June 30, 2022 1:56 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Unmarried partner inheriting real property - mortgage terms

My immediate thought is to deny this as a valid creditor's claim.

*disclaimer* I have not litigated this issue in a creditor's claim so I may be entirely off-base.

But I operate under the presumption that a creditor's claim is a claim against the estate that, if valid, must be satisfied before you can proceed forward and eventually close the estate.  Because of the Garn-St. Germain Act, (presuming they are valid under those terms and conditions), this is not a valid creditor's claim as the statute allows for the mortgage to continue under that law.

I might try to make a few phone calls to talk with someone at that institution (preferably their legal department) to try and get this resolved.

But the bottom line is that I have operated my estates in such a manner that if there is a claim filed - we must resolve it one way or another - before we can move forward.

Brent

Brent Williams-Ruth (pronouns: he/him)

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On Thu, Jun 30, 2022 at 1:30 PM Natalie Kuehler <nk at kuehlerlaw.com<mailto:nk at kuehlerlaw.com>> wrote:
I just had an spouse who is taking real property as community property and the lender filed a creditor’s claim, even though the surviving spouse is already named on the loan documents and of course the loan is secured by a deed of trust. I’m told a creditor’s claim was filed because “we had issues in the past with remedies being waived when a secured creditor did not do so. However, we take the position that the loan is current and should continue to be paid in the normal course, notwithstanding the claim; we do not intend to foreclose or pursue other remedies unless the loan falls into default on a future date.”

I’m not sure what I need to do with the claim. We don’t dispute there’s a valid mortgage that needs to be paid on time and that the deed of trust encumbers the property. So do I just let the creditor’s claim sit there? Or do we enter into an agreement regarding the continued validity of the mortgage? I had proposed the lender just have the spouse assume the loan on her own if they wanted to and withdraw the creditor’s claim.

Natalie

Natalie N. Kuehler

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of Diane J. Kiepe <DJKiepe at depdslaw.com<mailto:DJKiepe at depdslaw.com>>
Date: Thursday, June 30, 2022 at 12:59 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Unmarried partner inheriting real property - mortgage terms
I have a son who is inheriting land and the credit union said he has to “assume” the loan.  I had never heard that term and told the PR to make sure the heir understands what he is signing.  In the end, I think the heir may refi to pull out some equity anyway but, it just struck me as odd – of course, I still learn something and hear something new everyday!

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Brent Williams-Ruth
Sent: Thursday, June 30, 2022 8:35 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Unmarried partner inheriting real property - mortgage terms

I do not hold any belief to be an expert on the Garn-St. Germain act, but there are specific provisions pertaining to the "due on sale" clause.  The fact that they are not married, I would believe, kicks this into a (d)(3) situation - a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; - but as you can see the requirement is that they were joint tenants on the title.

Normally, I would agree with everything Dalynne says....however, I have a current probate where the note is held by US Bank (yes, I am naming names) and they are being VERY AGGRESSIVE to obtain proof that the person who is inheriting will be doing so under the terms of the Act.....I believe that with the mortgage rates rising substantially that we are going to see many more banks take interest in following the strict letter of the Act because they would love nothing more to either a) refinance to a higher interest rate or b) have the property sold and taken off the books as a liability where they will increase their cash on hand that said bank can then re-lend to someone else at a higher rate.

Just my two cents on this.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

**EFFECTIVE IMMEDIATELY** All mail sent through the USPS should be sent to the following address: PO BOX 3319; Federal Way, WA 98063

Office/Scheduling Phone: (253) 285-7751

Direct: (253) 285-7453

e-mail<mailto:Brent at Williams-RuthLaw.com> / website<http://www.williams-ruthlaw.com/> / facebook<http://www.facebook.com/bwrlaw> /

On Thu, Jun 30, 2022 at 8:17 AM Suzanne Lieberman <suzanne at cmslawfirm.com<mailto:suzanne at cmslawfirm.com>> wrote:
Hello,

If an unmarried surviving partner inherit's decedent's real estate and partner is the sole beneficiary under decedent's will, the lender can't call the note under the federal regulations, correct (the partner can maintain the mortgage terms, if a regular mortgage)?

Sincerely,

Suzanne Lieberman
CMS Law Firm LLC<http://cmslawfirm.com/>
811 Kirkland Ave. Suite 201 (please note new address!)
Kirkland, WA 98033
206-383-6484 (Cell Phone)
206-659-1512 (Main Office)

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