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    dillydumpling's Avatar
    dillydumpling Posts: 5, Reputation: 1
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    #1

    May 29, 2011, 01:39 PM
    What happens to a Home equity line of credit after death of borrower?
    My brother passed away leaving me 3 investment properties (via trust), all with mortgages and renters in place. There is a heloc attached to one property. A year has passed and I have all the houses in my name as well as control over the mortgages and am just barely breaking even. I have contacted the bank with the HELOC and they have not responded. What will happen if I stop making the payment on the heloc?
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
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    #2

    May 29, 2011, 01:55 PM

    They have a lien against the property. They'll exercise it. I'm amazed you get a new mortgage without paying off an existing line of credit.

    Or did you just assume the payments (which very well could be illegal if your brother is deceased).
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #3

    May 29, 2011, 04:22 PM

    If the properties were in trust to you, then they should have passed to you outside his estate. Depending on the wording of the trust. Did an attorney handle the disposition of the trust or are they still in the trust?

    The HELOC represents a lien against the property in question. If you default, they can foreclose on the property.
    dillydumpling's Avatar
    dillydumpling Posts: 5, Reputation: 1
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    #4

    May 29, 2011, 07:48 PM
    Quote Originally Posted by JudyKayTee View Post
    They have a lien against the property. They'll exercise it. I'm amazed you get a new mortgage without paying off an existing line of credit.

    Or did you just assume the payments (which very well could be illegal if your brother is deceased).
    I did a simple assumption on all 3 properties, never had a response from the bank with the HELOC.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #5

    May 29, 2011, 08:05 PM

    They will treat it as default on the loan, with the property as collateral on the loan.

    Again I agree, the loan may even become completely payable at the time you changed ownership without their written permission. When they did not answer, I would guess they assumeed you understood you could not legally proceed
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