mortgage

If you are not on the loan, are you on title? You would need to file the affidavit of death, and show the bank your husband has passed. On the other hand, since you cannot afford the payments, and the house is not in your name, you could look to purchase your own property, since your credit will not be affected. I would work with the bank, try to settle for a deed in lieu if they will not allow you to sell the home. If they wont work for you, tell them you want the deed for the house returned, in exchange for the key and possession to the home.

Chris, I followed you right up to the last eightteen words, "you want the deed for the house returned, in exchange for the key and possession to the home."

Presumably, she's an owner ("I am on the deed"), but since she's not the mortgagor the lender won't discuss things with her. Privacy laws aside, that's a stupid way for lenders to handle things, given the circumstances.

I'm not sure I buy your suggestion that she look for her own home - if a foreclosure takes place, she'll be the defendant and that'll show up as public record on her credit report, thereby causing creditors to question her credit standing.

It's probably more worth the trouble to seek out a real estate attorney to haggle with the lender and see if this situation can't be solved amicably.

What I mean by the cash for keys, is the lenders will take less action against the owner when you "turn in the property" similarly to a voluntary repo. I understand she is not on the loan, but the lender only care about 1 thing, money and or their collateral. If she is worried, call the lender and negotiate upkeep on the home, in exchange for an admiral way to leave the property without affecting the widow. The reason I say look for another home, is because if she is not on the loan, it is not reflected on her credit. Even after foreclosure. Foreclosures affect only the person on the loan. Even if she was on title, there is no recourse by the lender to the title holder, as long as they are not obligated on the debt. Therefore, she could qualify for her own residence. If she is not on the loan, the lenders recourse is only the property. Only a few states allow for deficiency judgements. And even on the deficiency, I do not believe that they can be attached to the spouse who was not liable on the debt from the beginning. Speaking to a Real Estate Attorney would be your best source for legal matters.

Having seen far too many credit reports on which public record (such as a foreclosure) is noted, I have to disagree that the lady wouldn't be impacted by a foreclosure. Public record does come into play with credit reports, and as an owner, she'd be facing the lawsuit filed no matter what; and the credit agencies will pick up on that and report the information.

I thoroughly concur that there would be no financial burden due to the lack of liability as a non-signer of the promissory note.

And, your final sentence, suggesting consultation with a real estate attorney is precisely what I also tell people. When needing expert advice, it's always the rule that one should seek out an expert.