Bank Attempts to Foreclose on Property Inherited by Surviving Spouse

Posted on Dec 23, 2013

A California woman is facing foreclosure of her home after her mortgage company concluded that the house is no longer the primary residence of her deceased husband. The woman, Laura Biggs, was married to George “Kenny” Mitchell when he passed away in 2003. His ashes remain in an urn that is kept at the home. The mortgage company involved in this matter is Select Portfolio Servicing, Inc., a sub-servicer for Bank of America.

The primary issue Ms. Biggs faces is the fact that her name is on the deed for the property, but not on the loan. Initially, the bank appeared willing to work with Ms. Biggs. On November 13, however, the bank changed its course of action. It notified her by letter that the property would be foreclosed upon approximately 30 days later. 

Ms. Biggs is not alone in her ordeal. The US Treasury Department devoted an entire section of its manual to addressing the problem of surviving spouses who are not on the loans for their properties. The Treasury attempts to incentivize lenders to help surviving spouses modify these loans rather than foreclose on the properties. 

Further complicating Ms. Biggs’ legal matter is that the loan was initially originated by Countrywide Financial, a lender that is now notorious for having offered unsuspecting homeowners low monthly payments that did not include their taxes or insurance. Many of these homeowners did not know that their mortgage payments did not include taxes and insurance until after they had already entered into the contracts. 

Under California law, Ms. Biggs is recognized as the inheritor of the property. She has continued to pay the monthly mortgage check since her husband’s passing. She has over $100,000 worth of equity in the property. Unfortunately, Ms. Biggs fell behind on the property taxes in 2011. The lender offered to add those monthly amounts to the mortgage company, then abruptly withdrew that offer without explanation. The bank refused to speak with Ms. Biggs because her name was not on the loan. She continued trying to make the monthly mortgage payments, but the bank refused to accept them. 

As of December 6, the bank has still not postponed the foreclosure sale. It remains to be seen whether Ms. Biggs will be forced to leave her home at the end of December.

We wish Ms. Biggs the best of luck in keeping her home.

Read More About Bank Attempts to Foreclose on Property Inherited by Surviving Spouse...

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm