The mortgage on the condo is greater than its value. I don't have the money to pay the mortgage when the condo passes to me upon my mother's death. Since I'm on the warranty deed (not the mortgage note) can the mortgage company come after me if I decide not to pay the mortgage and "walk away"?
Lots of older issued RM are now negative equity, like your mom's house is. The 2 big players in RM were Bank of American and Wells Fargo and they both got out of the RM game because the huge negative equity losses. You are not personally responsible for anything on the RM or any of your mom's debt, so this should not affect your credit rating. Unless you cosigned. Which hopefully you did not do?
More than 50% negative equity. Wow, there is probably no rebounding at that big of a %. If it were me, I'd put the keys with a tag of the address and mortgage account # into an envelope and Fed Ex them to the mortgage holder (so you have proof of doing this) and just walk away from it. Don't spend another cent on the house. If you mom is elderly and just on Social Security, there is nothing a debtor can attach for $ either. Could get ugly but really what can they do.....nothing.
You mention being her legal heir. So are you the one named to be executor as per her will after she dies? If that's the case, then as executor, you have to go to probate to deal with her estate. If the house still is an issue when that happens, then the house and it's debt are a part of her estate. If there are other assets in her estate (savings account, securities, etc), then you will have to liquidate those to pay off her debts in their order of importance as per the death or probate laws in her state. Funeral expenses usually come first then medical then mortgage. You really need a probate attorney to work with you on doing all this. Probate even when it's simple is pretty specific (rather than complicated) but requires notifications and filings to be done in a set timeframe and a good probate attorney is just worth it. Good luck and keep a sense of humor.
If you can't re-finance or keep pay the original loan, then try to sell the house as quickly as possible. Do not do any repairs as there are enough Buyers out there who want houses to flip. Get an appraisal from a licensed Appraisal to get an idea of how much the house is worth. Call a Realtor, and make sure the house is being sold "as is".
Now since your names were already on the Deed when your Mom passed, you might need to pay capital gains taxes when you sell, if the value of the house has gone up a lot since when your Mom first bought the house. That's the down size of putting the adult children's names on the Deed while a parent is still alive.
Otherwise, if you had inherited the house via a Will, then the cost bases of the house would be the day your received the house, not back when Mom had bought the house.
I know this becomes a crazy maze, and can get complex. And some elders think if they leave the house to an adult child that the mortgage goes away upon death. As we all know, that isn't how it works.
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