[EarlyRetiree]

...mortgage transfer to the heirs? My father-in-law passed away recently and he owed as much or more than the value of the house on a home equity loan. Can we let the loan default and let the house foreclose? Or will the home equity loan automatically transfer to the heirs and affect their credit?

This home is in Texas.

[Landlord]

The house should go into probate, with the rest of the debts. It should not negatively effect the heirs credit.

[staremwi]

snoopy has a good point. you need to get with the lawyer of the estate and the executor (or if you are) and also the bank. The bank will be able to tell you about the insurance...good luck.