Can I stop a foreclosure during probate? Hey guys, it’s Brad from probateresource.com. Thanks for checking out this video. So Probate Resource, we’re a real estate solutions company specializing in the world of probate inheritance properties. We’re based out of metro Atlanta. We buy houses all over the state of Georgia. We even buy houses in other states as well. And hopefully I can help you a little bit here.
So today’s question is can I stop a foreclosure during probate? And the answer is maybe. Ultimately it’s going to come down to the lender, whether or not they allow it. We’ve had some lenders reject it and some lenders allow it. And I want you to stop and put yourself in the bank’s shoes for a minute. You’re like, “Screw the bank. I don’t want to put myself in the bank’s shoes.” No, just stop. Hear me out here. Put yourself in the bank’s shoes.
If you’re a bank, and obviously the loans in default, you haven’t been paid for a long time, and you can see the light at the end of the tunnel. And what do I mean by that? Well, you look at the information and you realize that you might be getting paid off here in a month. Maybe you do the foreclosure, it takes three weeks or whatever. Maybe you might be more inclined to say, “Yeah, we’ll go ahead and stop the auction.”
I’m going to give you a real life example here. So we are doing a probate deal right now, been going on for over a year now, and the reason it’s been going on over a year is because originally this gentleman, he passed away, he owned a personal residence and he owned a rental property. And he had a will, and his wife was named executor in his will, and he passed away and his wife wanted to sell both properties. So we said, “Okay, sure, no problem. But hey, in order to sell the rental property, because it was only in his name, we’re going to have to probate his estate in order to sell the rental property and you’ll be the executor of his estate, because you’re named in the will as the executor.” She said, “Okay, sure, no problem.”
But their personal residence, they fortunately owned it as joint tenants with survivorship. So once he passed away, she was 100% owner of the property. Sadly, the day before we were going to close and sell their personal residence to us, and we had just started the probate process, she passed away tragically. She had an aneurysm and passed away. And now we were back to the drawing board and we said, “Okay, crap. What do we do here?” So what we did is we reached out to his son or her stepson, and he agreed to be the administrator of the gentleman’s estate, and then we got the sister-in-law, so the lady who passed away, her brother’s wife, agreed to be the administrator of her estate.
Mind you, none of these people live in Georgia. So they all live in completely different states. One lives in Washington state, one lives in Washington DC. Ironically, they both live in Washington. And they agreed to probate this and we got one of our probate attorney firms that we work with to help probate this. And we actually had to do two different probates now instead of just one.
So we did all this, dah, dah, dah. It took forever to get documents. Courts took forever, miscommunications, blah, blah, blah, blah, blah, blah, blah, blah, blah. Anyways, finally we see the light at the end of the tunnel. We are like one week away from him having his probate letters. Unfortunately, the house, the personal residence was actually lost to foreclosure. We weren’t able to save that one. It went to foreclosure auction, it was in August over the summer. Mind you, we started this whole thing in March or April of last year.
So anyways, the house was lost in a foreclosure auction. There were excess funds sitting there, which if you don’t know what that means, so here in the state of Georgia, this doesn’t apply in every state, but if there’s a foreclosure auction, and let’s say you owe the bank $150,000 and the house sells at auction for $200,000, well, the bank is only entitled to get $150,000. All they’re entitled to is what they’re owed. So then there are excess funds over and above what the house sold for at auction. Because remember, it’s an auction and people bid and say, :Hey, I’ll pay 200. I’ll pay 210.” So anyways, if it sells over and above that, there are excess funds sitting there and those excess funds can be claimed by the owner of the property, which in this case is an estate.
So we still had to go through probate. We still had to probate the wife’s estate so that the estate can go back and claim those excess funds and use those funds to pay off the debts to the estate. In this case, there was some IRS liens and dah, dah, dah. We still had to do that probate. We still also had to do the other probate because in order to sell the rental property, we need someone in charge of the estate. So between the client taking time, the probate attorney taking time, the court’s taking their sweet time because his was in DeKalb County, which DeKalb takes forever and a day here in Georgia to do probates, w.E’re finally a week away from getting his letters of administration and being able to finally close this deal.
But the crazy part is, is that a few weeks ago, we got notice that the house was actually going to be auctioned off the 6th of June, which is the first Tuesday in June. So the house is going up for auction. We’re like, “Oh, crap. Are we going to be able to get this thing closed in time?” If everything goes right, we will. We should have probate letters next week, and we can close immediately after that. But if we don’t get the letters, if he doesn’t get the letters in time, we’re not going to be able to close. So what we’re actually doing, we’ve already reached out to the lender, had my real estate attorney who’s handling the closing reach out to the lender. They finally got us a payoff. That was a battle in and of itself, trying to get payoff authorizations and all this stuff. They finally agreed to provide a payoff, and they said, “Okay, we’ll stop the auction too if you can just send us basically a closing statement.”
Basically, in essence, at the end of the day, the bank is getting paid off here as soon as we get our probate letters, which might happen before the auction, or it might happen like a week after the auction or the week of the auction. We don’t really know yet. It’s sort of up in the air. From the bank’s perspective, they’re going to get paid off here in the next few weeks. So to them, they don’t really care. So they’re willing to stop this auction because they know they’re going to get paid off here in the next few weeks. Versus maybe a scenario, we had an instance, a gentleman reached out to us a couple months ago and his house was going to foreclosure. He inherited this house from his dad. He was living there. And he just filed for probate two days before he called us, and he called us less than a week before the auction. We’re like, “Yeah, man, we can try.” We reached out to the lender, we tried our best, but they didn’t want to stop the auction. So the house actually ultimately went to auction.
Now, if you’re in this situation and you are facing foreclosure, and you;re living in this house you’ve inherited and it’s getting foreclosed on, and let’s say you’re the tenant, you’re the person living in the house, they can’t kick you out right away. So don’t feel like you’re going to get kicked out right away. Also, if the house sells at auction and that evening or the next day, someone knocks on the door and says, “Hey, I’m the investor who bought this house. You need to get out.” Don’t let them do that. You have rights. There are federal laws and state laws that protect you that do not allow them to immediately evict you. They have to give you proper written notice and they have to give you proper timeline to get out of the house. So depending on which state you’re in, make sure you research that, and it will tell you if the house is being foreclosed on how long until they can evict you out of the property. So again, that’s different from state to state, but there’s also federal guidelines that dictate that as well.
So I hope this video helped you out a little bit. Probate can take forever and then throw in a foreclosure in the mix, and that’s even more complicated, but you don’t have to fret. Sometimes the auction can be stopped. Now that doesn’t mean that it’s going to be stopped forever. That just means it can be postponed. The bank still wants to get paid off, so you’re still going to have to sell the house, but you may not have to sell it right now. You might be able to get a few more weeks or whatever if you need to finish the probate. But again, it’s entirely up to the lender.
So thanks again for checking out this video. I’m Brad from probateresource.com. Again, we’re a real estate solutions company. So if you have a house that you’ve inherited and you want to sell this house, you want a quick, easy, fast cash offer, maybe the probate world is just mind-boggling to you and you can’t figure it out. That’s what we do. We’re experienced in this game. We’ve been doing probate inheritance deals for a long time and we’ve happy to help you out with that. So also, if you’re in the state of Georgia and you want to maybe try your luck on listing the property out on the MLS, try to get top dollar for it, I’d be happy to list the property for you. I’m actually a licensed agent here in Georgia with OneSource in Woodstock. Be happy to discuss the options with you, whether maybe a cash offer is best for you or if you want to list the property. So thanks again for checking out this video. I’m Brad with probateresource.com. Have a great day. Bye-bye.
Can I Stop a Foreclosure DURING Probate?
It’s Brad from probateresource.com. Probate Resource is a real estate solutions company that specializes in dealing with probate inheritance properties. We are based in metro Atlanta and purchase houses all over the state of Georgia, as well as other states. We aim to assist you with your queries.
The question we will be addressing today is whether it is possible to stop a foreclosure during probate. The answer is not straightforward, as it depends on the lender and their policies. In the past, we have had some lenders who accepted the request, while others have denied it. It is essential to understand the lender’s position in this situation. Even though it might not be easy, try to put yourself in the bank’s shoes to see their perspective.
Bank’s Perspective
If you’re a bank and have LOANS THAT ARE IN DEFAULT, meaning you haven’t been paid for a long time, you may be able to see the light at the end of the tunnel. By this, I mean that after reviewing the customer’s information, you may realize that they might be able to pay off their debt in a month. Due to this, you might consider stopping the auction or foreclosure proceedings.
I’ll provide a real-life example to illustrate my point.
We’re currently involved in a probate deal that has been ongoing for over a year. The reason for the prolonged duration is that the deceased man owned a personal residence and a rental property and had a will. In the will, his wife was named the executor. After his passing, she expressed interest in selling both properties. We agreed to sell the rental property, which was only in the man’s name, but explained that we would need to probate his estate first and that she would be named as the executor. She agreed to this.
Fortunately, for their residence, they owned it as joint tenants with survivorship.
Consequently, upon his passing, she became the 100% owner of the property. However, tragically, the day before we were scheduled to close and sell their residence to us, and as we had just initiated the probate process, she also passed away unexpectedly due to an aneurysm. This unfortunate turn of events led us back to square one, prompting us to reconsider our approach. We reached out to his son, her stepson, who agreed to serve as the administrator of the gentleman’s estate. Additionally, the sister-in-law, the wife of the lady who passed away, agreed to act as the administrator of her estate.
It’s worth noting that none of the people involved in this situation live in Georgia. They all live in different states. One person lives in Washington state and another lives in Washington DC (ironically, the same name but different locations). Despite the distance, they agreed to probate this and we enlisted one of the probate attorney firms that we work with to help manage the process.
Unfortunately, we had to do two different probates instead of just one. After many setbacks including delays in obtaining documents and communication mishaps, we finally made some progress. We were just a week away from the probate letters being granted when we received some unfortunate news. The personal residence had been lost to foreclosure and we were unable to prevent it from being sold at auction back in August of last year. It’s important to note that this entire process began in March or April of last year.
Excess Funds
The house ended up being lost in a foreclosure auction, but there were leftover funds—what we call excess funds. In the state of Georgia, and not every state, this concept applies: in a foreclosure auction, if you owe the bank, let’s say, $150,000, and the house sells for $200,000, the bank is only entitled to that $150,000. They get what’s owed to them. So, a surplus remains after the auction because it’s a bidding process—people might bid $200,000 or even $210,000. Any surplus beyond that amount remains as excess funds, which, in this case, can be claimed by the property owner, namely, the estate.
We still had to go through probate in order to claim the excess funds and pay off the estate’s debts. The wife’s estate also needed to be probated to deal with IRS liens and other issues. Additionally, we needed to appoint someone to be in charge of the estate so that we could sell the rental property. However, due to delays from the client, the probate attorney, and the court (as it was in DeKalb County which takes a long time for probates), we are only now a week away from receiving the letters of administration and finally closing the deal.
A few weeks ago, we received notice that our house would be auctioned off on the 6th of June, which is the first Tuesday in June. We were worried about whether we could close the deal in time. However, if everything goes as planned, we should have the probate letters next week and can close immediately after that. But if we don’t receive the letters on time, we won’t be able to close the deal. To avoid this, we took action and contacted the lender. We had our real estate attorney, handling the closing, reach out to them. It took some effort, but we finally got the lender to agree to provide a payoff. They also said they would stop the house from being auctioned if we could send them a closing statement.
The bank will receive payment as soon as we receive our probate letters, either before, during, or after the auction. It’s uncertain at this point. However, the bank is not too concerned because they know they’ll receive payment in the next few weeks. They are willing to stop the auction because of this. On the other hand, we had a similar situation before where a gentleman inherited a house from his father, filed for probate two days before the auction, and called us less than a week before the auction. We tried our best to contact the lender to stop the auction, but unfortunately, we were unsuccessful. As a result, the house went to auction.
If you find yourself in a situation where you are facing foreclosure on a house you’ve inherited and are currently living in as a tenant, you don’t need to worry about being kicked out immediately. The law protects you and it won’t allow them to evict you without proper notice. Even if the house is sold at auction, the new owner cannot kick you out without following the legal procedure. They must provide you with written notice and a proper timeline to vacate the property. The laws and timelines may vary depending on your state, so it’s important to research and understand your rights. Both federal and state laws protect you from being evicted immediately after foreclosure.
Bottomline
I hope this video has been helpful to you. Dealing with probate and foreclosure can be a lengthy and complicated process, but there is no need to worry. In some cases, an auction can be postponed, but this does not mean it will be canceled altogether. The bank will still want to recover its money, so you will eventually have to sell the house. However, you may be able to buy yourself some extra time to finish the probate process. Ultimately, the decision to postpone the auction will be up to the lender.
Let’s Connect
My name is Brad, and I represent probateresource.com, a real estate solutions company.
If you have inherited a property and need to sell it quickly and easily for cash, we can help. We are experienced in dealing with probate and inheritance matters and can guide you through the process. If you live in Georgia and want to list your property on the MLS to get the best possible price, I can help you with that too. I am a licensed agent with OneSource in Woodstock and can discuss all your options with you.