[WSBARP] Default Under DOT and Deceased Debtor

[Mary Stone]

I am on the Board of a self-help affordable housing non-profit where the
lender in first position is USDA-RD.  Our organization has a second.  The
owner died and payments have ceased.  The deceased owner does have an adult
son surviving who moved into the house, but is making no payments.  USDA has
filed a judicial foreclosure.  I suspect you may have to do the same, in
order to eliminate unknown heirs.  

 

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Tuesday, December 27, 2016 2:33 PM
To: wsbarp at lists.wsbarppt.com; 'WSBA Probate & Trust Listserv'
<wsbapt at lists.wsbarppt.com>
Subject: [WSBARP] Default Under DOT and Deceased Debtor

 

I am working with my local chapter of Habitat for Humanity and trying to
keep their legal costs down.  Debtor and volunteers put in sweat equity to
build a house.  Habitat sold house to Debtor and carried back two loans and
two deeds of trust.  Debtor is now deceased for several years and in
default.  Can't find Debtor's family and no one probated Debtor's estate.
House is vacant.  Should Habitat 1) foreclose on the deeds of trust and go
to a foreclosure sale (not sure how to do this against a deceased debtor) OR
should Habitat get itself appointed as a special/limited personal
representative and then, what?, sign a deed in lieu of foreclosure
transferring the property back to Habitat.  I like the probate route because
it would probably be faster and if Habitat uses the deed in lieu of
foreclosure, Habitat can keep the house in its inventory of affordable
housing.  Probably move the court for permission.  On the other hand, I
doubt we would be able to find relatives to give the Notice of Pendency
Proceeding.  Any guidance would be greatly appreciated.  

 



 

 

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