TechDesignz Creations: Hiding The Spouse’s Death from Lender is Legal or Not?

I have been hiding the death of my spouse from the bank so am I breaking any rule or it is okay? You may find many people who ask these kinds of questions to their real state advisors. Let’s have a look on it.

Posted on 18 September 2010

death of spouse

First of all, loosing a partner is really a stressing thing and if it is elated to a partner who have been providing you a financial support, as well, then it becomes more difficult to face this fact.

There are certain reasons that compel anyone to keep their spouse’s death confidential from their lenders. May be they are not in the financial state in which they can qualify for the same terms with the taken off the name of their spouse from the loan.

There are various federal laws available that support widows and widowers in such situation. These laws allow them to hold the loan by listing them either a borrower or as joint titleholder. But lenders don’t do this always because the basis of the loan changes if one of the markers dies.

Hiding the death from your bank may put you in any criminal scene (doubtful), as your bank may file a complaint of fraud against you. It is recommended to consult a lawyer with any legal questions. That’s because if you don’t report the death of your spouse to the Social Security Administration and keep receiving checks, then you are driving yourself towards a serious sanction nothing else.

Your bank can whisk away the loan anytime even if you have reported the death of your partner. That’s because lenders never want to keep distressed real estate on their lists. Additionally, lender may allow you to refinance your mortgage (but not in all cases) if you have been current with your payments.

The other incentive of reporting this issue to the bank is that, if your partner carries credit card insurance on his/her mortgage then house would be paid off in one single payment on your partner’s death. Show original documents for this purpose.

You can do another thing if you lost your partner and that is the changing of the beneficiary on your will, bank accounts, and on any other life insurance you posses. If you own a car but that is also registered on his name, then change the owner’s name on legal papers.