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Latest Lending - Deceased Customer Topics

Collecting Loans of the Deceased

05/14/2023

What kind of recourse (if any) does a bank have when a borrower passes away while s/he still has an active unsecured consumer installment loan? Any suggestions would be appreciated as to avoiding a loss on the loan.

Handling a joint loan and deceased borrower

04/23/2023

Are there best practices for handling loans with two borrowers and then one passes awayY What is the best way to handle consumer and mortgage loans when this happens? Should the bank require the survivor to refinance or allow them to make regular payments? And what about HELOCS? Would it be best to remove the limit and allow payments on the balance, leave limit and allow terms of HELOC to continue or require them to requalify/refinance? Then, what about IRS reporting if the decease person's SSN is on the 1098?

Borrower Passes Away: Charge-off Entire Balance?

04/05/2020

When we have a loan secured by real estate and the borrower has passes away, should the entire loan balance be charged-off, or just the amount above fair market value less cost to sell? Should the remaining balance be classified Substandard and moved to OREO?

Pulling Loan Payments from DDA

09/08/2019

We have a customer who passed away. The customer was the sole owner of two corporations. The first corporation is a real estate holding company. There is a loan and DDA to this entity. The loan payment is auto-debited from the DDA. There is a second DDA to the other entity, also a corporation, which is to the operating company. Can we continue to pull the payments from the DDA to keep the loan current until the estate is settled and the loan paid off?

Deceased Owner of HSA-Signer Left

07/07/2019

When the owner of an HSA passes away and there is a signer left, does the HSA need to be frozen or closed, or does the signer get to continue using it?

Deceased Customers with Outstanding Loans

03/26/2017

When a borrower is deceased, family members continue to make payment and the account has an escrow account: 1. Is the bank still obligated to continue​ paying taxes and insurance from the escrow account? 2. If the loan has PMI​ does the company need to be notified? If the loan does not have an escrow account: 1. ​If the loan payments are still​ being paid by a family member and the insurance is being paid but left in the deceased person's name​,​ ​w​hat avenue should the bank take?

Removing Deceased Joint Owner From HELOC

08/18/2014

I had a call from a customer that is joint on a HELOC and one of the joint owners passed away. She would like to remove him from the HELOC. Can this happen?

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REMA Issues and Advertising

04/14/2024

If all of a lender's marketing is targeted outside the US, aside from marketing within its "claimed" assessment area, could the lender be subject to REMA redlining review? I've read guidance that implies marketing doesn't have to be a factor for a REMA redlining exam to be conducted... • "REMA...defines who and where you serve, and as such, is different from a defined Market Area..." • "Where the lender actually marketed and provided credit, and where it could reasonably be expected to have marketed and provided credit based on its distribution of loans and applications " • Redlining analysis will look at lending and level of services in majority-minority census tracts compared to peers, among other items.

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