Can you borrow against a home that you don't fully own, i.e. inherited part, but without estate fully settled?

Question

My brother and I were left our parents' home after they passed. My brother, executor of the will, resided in the house at the time of their deaths and I did not.

The home is still in the name of "Estate of [my father]". My brother is supposed to buy me out of my half and has been dragging his feet and not responding to my requests for answers as to the status.

I found out he recently paid off some large debts at the same time he was supposed to get this loan to pay me.

My question is: Could he borrow money (i.e. get a loan/mortgage) using our parents' house as collateral if he does not fully own it? Again, the deed to the house (original mortgage was paid off by my parents before their deaths) is still in the name of the Estate and our father's will leaves the house divided between the 2 of us.

Answer 1

If the house is titled to the estate, neither of you own the house and it cannot be mortgaged. Executor of the will is supposed to provide to you and to the probate court periodic reports as to what is going on. Check them up and talk to your probate lawyer.

Answer 2

It is possible for him to get a loan against the house as long as the deeding all takes place at the same time as the loan is closing. Basically you and your brother will both have paperwork to sign, and the title company will not send out checks until the loan funds from the mortgage company.

For that deeding to take place, the estate will generally have to be fully settled. That can take time, but you might wish to retain a lawyer to be certain your interests are completely protected. Many people feel like getting legal representation will strain family relationships, but I find the opposite to be true. They often grease the wheels and get the process finished quickly and fairly which ultimately reduces such strain.

I would view it as a good sign if he is paying off large debts, because that means he will be in a better position to take a mortgage to pay you your share, but that assumes he is acting in good faith.