What Happens If a Borrower Passes Away

Losing a loved one is never easy on the heart. Handling their estate after they pass can be difficult and can leave you feeling overwhelmed with what to do next. We are here as a resource to help you through this transition.

We know it is difficult to talk about the death of a loved one, and the to-do list once they are gone can feel overwhelming, especially while grieving. Vanderbilt Mortgage and Finance, Inc. is still here for its customers to help navigate through this difficult conversation. We will work with the surviving signer or family members to offer a smooth transition.

What We Need from the Surviving Signer or Family

When a borrower passes, we will ask a few questions, such as, what day did they pass and if probate has been started. We will also request a copy of the death certificate to be sent in for our records.

Once we have this information, we will stop reporting on their credit and list their name, for example, as “Estate of John Doe”.

This information can be sent to customercare@vmf.com or faxed to 865-380-3418. A copy can also be mailed to us at 500 Alcoa Trail, Maryville, TN 37804.

If you are not sure where or how to obtain a death certificate, you can contact the funeral home, health department, or county records.

Who Can Make Changes on the Account

  • A surviving co-borrower will continue to have the same ownership to the account as they did prior
  • Executor of Estate – or EOE – will have the same power as a borrower. We will need Executor of Estate paperwork on file before we can recognize this.

If the customer had a Power of Attorney (POA) prior to death, this paperwork is void once they pass. The person who held Power of Attorney will no longer be able to make changes or be privy to information unless they had been added as an authorized contact on the account prior to the customer’s passing or if they do not have EOE paperwork.

If a person was previously listed as an authorized contact, we can still speak with them regarding the account.


What Is a Successor in Interest?

A survivor who has ownership interest can step forward and become the Successor in Interest after a signer passes away. A current living borrower on the loan would be ineligible to become a Successor in Interest as they already have ownership rights.

Our Loss Mitigation team will help guide surviving members through this process and let the party in interest know what is needed to proceed.

A Successor in Interest may have ownership on the property, but that does not make you liable for the remaining payments on the loan. However, if the loan were to default, this could affect ownership. Once a confirmed Successor, you can apply to assume the loan. Prior to a customer’s death, the signer cannot request a specific person to become a Successor in Interest with their mortgage company.

Seeking legal counsel to put your affairs in order will benefit the ease of this transition after passing.

Do I Need to Remove a Passed Borrower from the Account?

Vanderbilt Mortgage and Finance does not require a deceased borrower to be removed from the loan. If payments are maintained, the home will stay in good standing even if all borrowers to the loan are deceased. If the account does become in default, the mortgage company does have the option to foreclose or repossess the property.

Again, the option to assume the loan is there for a confirmed Successor. We hope this resource has helped provide guidance regarding this difficult topic. If there are more questions about this process, please feel free to contact us as we will help you navigate through this time. For any further questions, contact our customer service department.

VMF does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only.

Stay in the Know

Get home owning tips and updates in your Inbox.

Email signup form

By subscribing, I agree that Vanderbilt Mortgage may contact me by telephone, provide me with marketing communications about Vanderbilt Mortgage products and services, and share my contact information as described in our website terms.