Foreclosure Q & A – Why Are Children of a Deceased Parent Named As Defendants in a Foreclosure Complaint Against the Parent’s Home?

Being served with a foreclosure complaint is an anxious experience for anyone, but in most cases it is not unexpected. The person served with the complaint knows that they have been served because the mortgage payments on their property are delinquent. In New Jersey, the provisions of N.J.S.A.2A:50-56., require that a homeowner be served with Notice of Intention to Foreclose not less than 30 days before a foreclosure complaint is filed.                                                                                                                                                                                                       The experience is very different for the child of deceased parent who is named as a defendant in a foreclosure complaint against the deceased parent’s home, and is bewildered and frightened as a result.  A common example is a child who has left a parent’s home long ago, and assumes that after the parent’s death, the home will be taken by the lender because a reverse mortgage on the property has exhausted all equity in the home.  When they are served with a foreclosure complaint which names them as a defendant,  and which recites that hundred of thousands of dollars is owed to the mortgagee, it is entirely understandable  that they often conclude payment is being demanded from them.                                                                                                                                                                                            Most frequently nothing is being demanded from them. Contrary to their fears, the reason that they have been named as a defendant is because of the New Jersey Laws which govern inheritance.     By operation of law, they have an interest in their deceased parent’s estate even though in one of those wonderfully counterintuitive examples from the world of law – there is nothing in the estate in which they have an interest.
Often the parent died without making a will. The estate of a person who dies without a will is called an intestate estate. If there is any property to distribute, a survivor of the deceased applies to the Surrogate to be appointed as the Administrator of the estate, and the assets of the estate are distributed in accordance with the provisions of NJ Rev Stat § 3B:5-3  “Intestate share of decedent’s surviving spouse or domestic partner” and NJ Rev Stat § 3B:5-4 “Intestate shares of heirs other than surviving spouse or domestic partner.”The Statutes apply even if no application is made to the Surrogate to appoint an Administrator. NJ Rev Stat § 3B:5-4 (a) requires that “Any part of the intestate estate not passing to the decedent’s surviving spouse or domestic partner under N.J.S.3B:5-3, or the entire intestate estate if there is no surviving spouse or domestic partner, passes in the following order to the individuals designated below who survive the decedent : To the decedent’s descendants by representation”
In sum, a child of deceased parent who is named a defendant in a foreclosure complaint should not assume that the mortgage lender is attempting to collect delinquent mortgage payments.
They most likely have been named because due process of law requires that before a court may grant a judgment of foreclosure against a property to a foreclosing mortgagor, anyone with an interest in the property be given notice of the action even if the interest is worthless.
In bears emphasis that the above example applies only where the amount due on the mortgage exceeds the value of the property, and more generally that legal information is not legal advice. Therefore, anyone who is named as a defendant in a foreclosure action should consult an attorney to determine whether it would be in their interests  to be represented.