There is a new decision out of the Ohio Court of Appeals today in the case :
Kirshner v. Fannie Mae, 2012-Ohio-286 (Ohio App. 2012)
The case has some interesting discussion which might be applicable to several recent prior threads relating to foreclosure in a probate setting.
It seems to me that this decision mostly vindicates statements made by Bill, ka and t.
I found this paragraph to be interesting, though it was found to not be precisely the correct statement of Ohio law:
"Appellant argues that it has been settled law for 900 years that, when one who is seized of real property dies, the property devolves by descent to his or her heirs who are immediately invested with legal title and complete ownership in their own right. While the interest in property may be defeasible to satisfy encumbrances on the property, it nonetheless becomes the property of the heirs and at that point becomes subject to attachment. Since Matthew Fink was a statutory beneficiary when his mother died, he and his siblings became owners of the real property in parcenary. See R.C. 2105.06. The lien against Matthew Fink attached to the property while he owned it, appellant insists, and remains viable and subject to foreclosure in the underlying lawsuit."
Although the case was decided based upon the superior interest of Fannie Mae in respect of the reverse mortgage, it seems likely that in respect of a regular mortgage, the lien also probably fails.
Heir Mathew Fink owed money to Alan Kirschner. Decedent Bertha Fink owed Kirscner no money at all.
Matthew Fink's ownership interest in the subject property was subject to the payment of Bertha Fink's prior debts by administrator Philip Kink. At best, Matthew Fink was entitled to what was left as a share to Matthew Fink after payment of such debts. The administrator had the authority (with the court's consent) to sell the property to pay Bertha Fink's just debts. Finding that there was essentially no equity in the property, he did so by executing a deed in lieu.
It is important to bear in mind that this case is based upon Ohio probate law, but it seems to be pretty mainstream and totally consistent with posts by Bill, ka and t.