Detailed Answer

This section explains, under Louisiana law, what typically happens to a mortgaged home when the owner dies and what you will need to do to take over the mortgage and keep the house. This is general information only and not legal advice. Consult a Louisiana attorney about your specific situation.

Who owns the house immediately after the death?

Ownership does not automatically disappear when someone dies. In Louisiana the decedent’s ownership interest becomes part of the decedent’s succession (estate). The way title passes depends on whether there is a valid will, the nature of ownership (sole ownership, joint ownership, community property), and whether you successfully complete the succession process in court. For information on Louisiana statutes and Civil Code provisions governing successions, see the Louisiana Legislature website: https://legis.la.gov/.

What happens to the mortgage?

The mortgage is a lien on the property and survives the borrower’s death. The loan remains payable by the estate and by the person who becomes the new owner of the property. If the heirs or successors do not continue payments, the lender can seek foreclosure under the mortgage terms.

Can you simply “take over” the mortgage?

There are three common ways to keep the home and handle the mortgage after a death:

• Assume the loan. Some lenders permit a successor to assume the existing mortgage. The lender typically requires an application, income verification, credit check, and an assumption agreement.
• Refinance the mortgage into your name. You apply for a new loan using your credit and income to pay off the decedent’s mortgage. This is often required if the lender will not allow an assumption.
• Keep the existing mortgage in place while the estate or heirs make payments. If the heirs become owners through succession and continue payments, the mortgage stays attached to the property.

Federal rule that may help

Federal law limits when a lender can enforce a due-on-sale clause (accelerate the loan) after transfers. A transfer by devise (by will or by intestacy at death) to a relative who was living in the property may be exempt from enforcement. See the federal statute on due-on-sale clauses (12 U.S.C. § 1701j–3): https://www.govinfo.gov. Even with this federal protection, the lender still may require documentation and might insist on an assumption or refinance in some cases.

Practical steps to take in Louisiana

1. Locate the mortgage documents and current mortgage statement. Obtain the loan number and lender contact information.
2. Obtain multiple certified copies of the death certificate from the parish (county) where the death was registered.
3. Find the decedent’s will (if any) and identify the executor or the heirs. If there is no will, Louisiana’s intestacy rules determine heirs; you can read Louisiana statutes on succession processes at the Louisiana Legislature site: https://legis.la.gov/.
4. Open the decedent’s succession in the appropriate parish court. In Louisiana this is called opening a succession; the court issues documents showing who has authority to act for the estate. You will need these documents to deal with the lender and to change title.
5. Notify the lender that the mortgaged borrower has died and provide a death certificate and documents showing who is authorized to act for the estate (executor, administrator, or successor). Ask the lender for a payoff statement and demand what documentation they need to consider an assumption.
6. Decide whether to assume the loan, refinance, or — if you cannot take on the debt — sell the property to pay off the mortgage. If you assume or refinance, prepare for underwriting that evaluates your credit and income.
7. If you will occupy the home, check whether federal protections apply to prevent automatic acceleration of the loan (see 12 U.S.C. § 1701j–3). Still, lenders commonly require paperwork from successors.
8. Record any new deed or transfer that changes title at the parish clerk’s office once succession documents and mortgage arrangements are in place.

Possible complications

• The lender refuses an assumption. You may need to refinance or the estate may need to sell the property.
• Estate lacks sufficient assets to pay creditors. Creditors (including the mortgagee) have priority; if payments lapse, lender can foreclose on the property subject to succession procedures.
• Joint ownership or survivorship arrangements. If the property was jointly owned with right of survivorship, title may pass directly to the surviving owner; you still should notify the lender and provide proof of death and survivorship documents.
• Community property and spousal rights. Louisiana has distinct rules about community property and spousal rights that can affect ownership and creditor claims; consult an attorney to understand how these rules apply to your case.

When to get a lawyer

You should consult a Louisiana attorney if any of these apply: the estate is insolvent or near insolvency, heirs or creditors dispute ownership, the lender threatens foreclosure, you are unsure how to open succession, or you need help negotiating an assumption or refinance. A lawyer can prepare succession documents, negotiate with the lender, and protect your rights.

Where to find resources and statutes

Use the Louisiana Legislature site to look up Civil Code and statutes about succession, property, and mortgages: https://legis.la.gov/. For federal law on due-on-sale clauses, see 12 U.S.C. § 1701j–3: https://www.govinfo.gov. For parish-specific filing procedures and forms, contact the clerk of the district court in the parish where the property is located.

Disclaimer

This article explains general principles of Louisiana law and practical steps to take when a homeowner dies. It does not provide legal advice and does not create an attorney-client relationship. For advice about your situation, consult a licensed Louisiana attorney.

Helpful Hints

• Get several certified death certificates—lenders and courts require originals.
• Contact the lender early. Lenders often have procedures for handling loans after a borrower’s death.
• Keep paying insurance and property taxes. Lapse can lead to additional liens or lost coverage.
• Ask the lender for a written payoff or assumption requirements so you know exact costs and steps.
• If you plan to refinance, check your credit and gather income documentation before applying.
• If heirs disagree about keeping the house, consider mediation before litigation.
• Use the Louisiana Legislature site for statute research: https://legis.la.gov/.
• When in doubt, consult a Louisiana succession or real estate attorney to protect your interests.