Dear Bob: I inherited my mother's properties, which all have mortgages. I was told by several real estate professionals that I must refinance these loans. Where can I find the law that says, since I am the daughter and will hold title, that I can just change the name on the mortgage as well as the Social Security number for tax purposes? These are single-family rental houses. - Syl C.
Dear Syl: Whoever gave you that advice requiring refinancing is mistaken. You don't have to change the name or the Social Security number on the mortgages nor do you have to refinance. Just keep making the payments. Any lender who tries to enforce a due-on-sale clause in the current buyer's market is crazy.
If the property was owner-occupied, the lender cannot enforce the due-on-sale clause, thanks to the federal Garn-St. Germain Act, since you are a child of the deceased owner.
However, because you don't live in the property, the lender could try to bluff you into paying an assumption fee. Only if the lender demands an outrageous assumption fee and insists on raising the interest rate should you consider refinancing.
If the mortgages have attractive interest rates and terms, just keep making the payments. Don't call the lender's attention to the situation. Your mortgage interest will be tax-deductible because your name is on the property title. It need not be on the mortgage obligation.
