My brother recently passed away and had taken out a home equity loan for $40K on his home. The first mortgage was paid in full. His wife did not work and she is on the deed and title but not on the note. Since he has passed away, is she liable for paying the home equity loan even though she is not on the note? This is in the state of Maryland.

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Originally Posted by lcoop_66

My brother recently passed away and had taken out a home equity loan for $40K on his home. The first mortgage was paid in full. His wife did not work and she is on the deed and title but not on the note. Since he has passed away, is she liable for paying the home equity loan even though she is not on the note? This is in the state of Maryland.

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Was the note secured by a mortgage (or other lien document) with the home as collateral? I am assuming she didn't sign this lien, correct?

It would depend on how they held the title to the home. Were they joint owners (or tenants by the entirety) with right of suvivorship, or were they tenants in common. The reason this may be pertinent is because, if she inherits some interest in the home through his estate, the note would have to be paid or otherwise accommodated, before that interest could pass through to her.

Assuming the home equity loan was secured by the home then it is an encumbrance against, at least, the husband share of the property. So it will need to be satisfied before the property can be sold or ownership transferred.

Yes, as a home equity loan, they are normally secured by the property, or his interest in the property.

First the estate will owe the money, so she can not clear the property into her name alone ( get new deed) until this is done,

Also if there is any property or money that has to go into the estate, it would have to be paid to this debt before anyone can get any of the money from the estate.

And as noted she could not sell the house, without paying the lien off