Thu, February 4th, 2010
Avoiding a Foreclosure in Probate in California
Though some may consider the Probate Code an onerous set of rules restricting the path which a personal representative (or executor) must follow to complete a probate in California, I take a different viewpoint in believing that it is fair and cautious. Where it is considered unduly restrictive by some, the Probate Code provides a guiding light by allowing the probate judges in this state to determine whether something should take place, or not take place.
A good example of this which is important in today’s real estate climate, is where the estate has a security interest in real estate to cover a loan (by way of a promissory note) made by the decedent (that is still due and owing). Instead of requiring a foreclosure of the real property, the Probate Code allows the representative to accept a deed in lieu of foreclosure, but only upon approval by the court. In gaining this approval, the representative must file a petition and show to the court why it is advantageous to just accept the deed in lieu of foreclosure.
Probate Code Section 9850 is the statute requiring the petition, and it states that approval is only granted after clear and convincing evidence is presented to the court. Though acceptance of a deed in lieu of foreclosure is allowed in probate, it is only permitted when the judge is comfortable with the particular situation, and only on terms and conditions imposed by the judge.
Posted by Nick Yonano at 05:24
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Labels: Mortgage Default, deed in lieu of foreclosure, foreclosures, probate, real estate
