Successor in interest means a person to whom an ownership interest in a property securing a mortgage loan subject to this subpart is transferred from a borrower, provided that the transfer is:
(1) A transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(2) A transfer to a relative resulting from the death of a borrower;
(3) A transfer where the spouse or children of the borrower become an owner of the property;
(4) A transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; …
In order for the mortgage servicer to offer opportunities to bring the balance current or other methods to retain the home, you may first have to document that you are indeed a successor in interest. Until you can confirm that you are the lawful successor in interest, a mortgage service may ignore you. This may include things like:
- A copy of the deed
- A copy of the divorce decree
- A copy of the will or affidavit and death certificate
- A court order showing you are the heir
- A trust agreement signed by a trustee giving you authority over the property
A big problem of the last foreclosure crisis was that a mortgage servicer would not give answers or share information with a successor in interest. Spouses and heirs had to move out and give up property unnecessarily. This has changed. Once it is established that you are a successor in interest, the servicer must send successors in interest disclosures which may include information about:
- Escrow accounts
- Mortgage servicing and transfers
- Error resolution
- Force-placed insurance
- Loss mitigation
- Payoff statements
- Periodic statements
Perhaps most importantly, a servicer must review and evaluate a loss mitigation application if it is complete even from a successor in interest (once that is confirmed).