Over at my Florida Estate & Tax Blog I wrote about the new trend for condominium and homeowners associations to go after the estates of deceased homeowners that have become delinquent in paying their association fees: Does Probate Stop the Collection of Condo and HOA Fees? Coupled with this question is the more broad question, does probate stop the foreclosure process?
As with association fees, absolutely not. If the probate estate has been opened and the estate is liquid and has the funds to pay the mortgage, then by all means it should be paid. But what if the probate estate is illiquid or even insolvent? Then the beneficiaries will have to make the mortgage payments out of pocket if they want to keep the property and seek reimbursement from the estate if and when it has the cash to do so. If not, then the bank can and will foreclose on the property in order enforce its mortgage.
What if the property is already in foreclosure when the owner dies? Then if the heirs don't file for probate - and they may very well not if the estate is small or insolvent - then the bank can proceed with opening the probate estate so that it can complete the foreclosure process.