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<p>An estate has an encumbered home with value enough to make sale
worthwhile if it goes well enough, but it's close. <br>
</p>
<p>The PR has nonintervention power to sell, but we're considering
just transferring the property to the heirs, since the estate is
solvent and the home appearts to be as well. <br>
</p>
<p><font face="Arial, sans-serif">To just transfer the property,
all that seems apparent is for the PR to execute a Special
Warranty (PR) Deed (which would include the excise tax
paperwork as well) transferring the home to the three heirs as
equal tenants in common. I would also, of course, send loan
paperwork and history to the heirs to let them know how to
honor the debt and avoid default. <br>
</font></p>
<p>Is that it? Does that work?<br>
</p>
<p>As I understand federal law won't allow the lender to
accelerate based on death & transfer to heirs, but how can
the PR close this estate without paying off the Deed of Trust or
obtaining creditor and heir agreement to transfer the residence
and debt to the heirs? What are/is the statutes, regulations, or
resources on the process of transferring the encumbered property
and the debt to the heirs? Is the secured lender's consent
necessary? Is consent of the heirs necessary or is the heir's
agreement to assume the loan necessary? <br>
</p>
<p>It looks like the relevant provisions (of the Garn St. Germain
Act) are these:<br>
12 U.S. Code § 1701j–3 - Preemption of due-on-sale prohibitions;
<span class="enumbell"><br>
(d)</span> <b class="labelleader"> Exemption of specified
transfers or dispositions</b><span class="enumbell"><br>
(3)</span> <span class="ptext-">a transfer by devise,
descent, or operation of law on the death of a joint tenant or
tenant by the entirety;</span> <span class="enumbell"></span><span
class="enumbell"><br>
(5)</span> <span class="ptext-">a transfer to a relative
resulting from the death of a borrower;</span><span
class="enumbell"></span><span class="enumbell"><br>
(6)</span> <span class="ptext-">a transfer where the spouse
or children of the borrower become an owner of the property;
</span> </p>
</font><font face="Arial, sans-serif">
<p>Mark D. Mullins</p>
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