Lender n Borrower and the authority between

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Someday16

Guest
If the Lender of the loan holds the note to a home do they become a landlord and make decisions for the home or is collateral? Same question sorda but what happens if lender holds note to a home and borrower dies before paying the loan off?
 

just_me

LoanSafe Member
Sep 14, 2015
508
37
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Lender of the loan can't become a landlord unless it has possession of the home (say after a foreclosure or deed in lieu). Yes, home is collateral for loan. Lender does not manage unless it actually takes possession from borrower ( as in a completed foreclosure ).

If the borrower dies before paying the loan off, the estate would likely go into probate. The lender would have to deal with the heirs. (They would have rights in a foreclosure.) There are laws on this and heirs can potentially take over the loan and modify it if it's affordable (such as a husband-wife situation), or arrange to sell or refinance the property (to keep or rent out).