Probate, Mortgages and Foreclosure

This column first appeared in the Express-News on February 24, 2016.

Dear Mr. Premack: I am an only child. My mother passed away recently and my father passed away last decade. She died with a Will naming me Executor and leaving all assets to me. The only assets are real estate: first, a homestead that is undergoing foreclosure with only her name on the deed, and second, a rent house with her name and my name on the deed. The rent house has a mortgage for about 60% of the house’s value and the loan is current. I filed an Affidavit of Heirship regarding the homestead. Does it suffice to make me owner? Would that work for the rent house, or can I hire an attorney to do Muniment of Title probate? Is probate unavoidable? – S.B.

Texas law provides a variety of probate procedures, ranging in complexity. Each procedure is meant to be used in different circumstances and each has differing restrictions on its use. You mention two procedures: Affidavit of Heirship and Muniment of Title. There are other legal proceedings that do not apply in your circumstances.

Affidavit of Heirship (formally called Non-Judicial Evidence of Heirship) is the only procedure that does not include judicial review. Did you do the Affidavit yourself or hire an attorney? It is supposed to provide family history on the decedent so the laws of intestacy can be applied to identify the new owner or owners. Statutorily, the Affidavit must be on record at the courthouse for five years before the family history is presumed to be true. However, as a practical matter that limit is often ignored by title companies, who often accept the identified heirs as the owners.

In many situations, Affidavit of Heirship is not appropriate. For instance, if there were multiple children or multiple marriages in a family yet the decedent’s Will left the house to only one person, the Affidavit procedure should not be used. Why? Because it ignores the Will and vests title with all heirs at law (not just the heir named in the Will). When there is a Will, a different probate procedure is better. In your specific case, using only the Affidavit may not gain you recognition as owner by the mortgage company, missing the opportunity to negotiate regarding the foreclosure.

Unlike the Affidavit of Heirship, an attorney-prepared Muniment of Title is a judicial procedure which is more reliable than an Affidavit. However, Texas law does not allow Muniment when there are unsecured debts (like credit card bills or unpaid medical bills). The mortgages on your mother’s homestead and rental property are secured debt, which do not block using the Muniment process. With her homestead in foreclosure, using a proper Muniment of Title process may give you the opportunity to renegotiate her loan or to stop the foreclosure by refinancing her loan.

Administration of her estate is another judicial procedure, and grants you “Letters Testamentary” to act on behalf of her estate. If her Will names you “Independent Executor” there is little to gain as it will not stop the foreclosure, and an attorney could guide you regarding becoming “Dependent Executor”. As Dependent Executor you may be able to slow or stop the foreclosure for a while. Any claim presented to a Dependent Executor must be filed in court, any foreclosure must wait until the claim is processed, and foreclosure can only take place with the court’s permission. Becoming Dependent Executor may give you time to either sell the house (paying off the loan at the time of sale) or to refinance the loan (curing the default and saving the property).

One thought on “Probate, Mortgages and Foreclosure

  1. Comment

    After reading this column I understand why it is worth the while to seek the knowledge of a lawyer.

    It is of great help to those in need.

    It is important to know the right aspect of certain business matters.

    It is nice to know there are different ways to look at a possible problem.

    It is good that someone can discuss the situation and get a recommendation on what to do.

    Like

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