Can a Life Estate Be Given on a Home Without the Mortgage Lender's Permission

[jsd9340]

My question involves real estate located in the State of: New York. My late ex wife owned a home with a sizeable mortgage. In her will, she gave her companion the option of purchasing the home from her estate at a given price. If he was unable to purchase the property, her will gives him a "life estate" to live in the home as long as he pays the mortgage and expenses of maintaining the home. Does this in fact constitute a life estate and what happens if and when the bank calls the mortgage note?

[Mr. Knowitall]

I am unable to review the will from here, so I'm not going to speculate as to whether your ex-wife's will was sufficient to in fact create a life estate for the benefit of her companion. If she did create a life estate and the mortgage lender requires the mortgage to be paid off, presumably he and the remaindermen will have to find a way to refinance or work something else out - we don't have any facts with which to begin to guess as to what the various people involved might consider doing.

[jk]

who are the remaindermen?

If the mortage could not be assumed by the remaindermen, they would have to finance the home. If they could not do so, the mortgage lender would have the right to foreclose and take possession. If that happens, the companion is simply out of a place to live.

she gave her companion the option of purchasing the home from her estate at a given price.

unless that amount paid off the mortgage or the estate had funds to pay the remainder, she could not sell the house to her companion for that price. The current mortgage lender does have the right to be paid or foreclose on the property.