Can my deceased grandmother's forclosed mortgage impact my credit if I am listed on the deed.

Worried, thanks for the clarifications. One thing that concerns me:

" I was told that the mortgage company was not seeking any deficiency judgment, but only to get the property back."

Verify this: Look at the initial and any subsequent pleadings - the complaint, and any amended complaint. If the intent is only to recover the property the "prayer" (a WHEREFORE, Plaintiff prays for....) should state this. If not, then there's a possibility that's not the real intent of the suit.

I don't think though that you can worry about your credit rating without being concerned about the intent and effect of the suit.

What you might do if you are willing to relinquish the property is raise the issue of negotiating a deed in lieu of foreclosure, or perhaps even a compromise whereby the bank pays you some nominal amount just to avoid the costs of foreclosure.

However, I do have some doubts about that route because allegedly the suit isn't the subject of foreclosure but rather property recovery. There may also be a quiet title action as one of the counts.

However, since you don't want the property, entering into this kind of negotiation is the quickest and most expeditious way to deed the property to the bank. I would make any agreement for a deed in lieu include the provision that if a deed in lieu is executed, that any action taken or planned to be taken to reflect this in your credit reports be prevented; this would bind the bank and prevent negative credit reporting.

You don't need to go through probate to speak with the bank. As a named defendant, you can contact the bank/plaintiff's attorney, unless you have an attorney who's handling the foreclosure on your behalf. If that case, the attorney should contact the bank's attorney.

However, if you don't have retained counsel, the cost could be as little as the cost of postage and an initial certified or priority mail letter opening negotiations with the bank's attorney. This is what I would do - make short work of this and ease your conscience and concern about your credit report.

I have also talked with an attorney, who originally advised that I let the property go into forclosure, but is now advising that I go through probate so I can get rights to speak with the bank at a cost of approximately $3500. I do not have the money to invest in a property that is not even worth $3500 to me.

The lawsuit was originally filled naming my grandmother and myself as defendants. I have attempted to discuss the matter with the bank, but they will not talk with me because my name is not on the loan. When I spoke with the lawyer filling the lawsuit I was told that the mortgage company was not seeking any deficiency judgment, but only to get the property back. Now that the bank is aware that my grandmother is deceased they have removed my grandmother's name from the suit and just named me as defendant. I am not interested in keeping the property. My only concern is that because I am listed on the deed that this judgement could be reported on my credit report, and I could be liable for it.

My grandmother purchased the home in 2007, and put me on the deed to avoid issues when she passed. However, this has created more issues then if we would have left her name only on the deed.

Did you sign the mortgage? If not, I don't see how you have any liability. However, there are a few facts that need to be clarified:

1. You mention a "judgment for payment". Was there a suit and a judgment entered against your grandmother, and if so, were you named in the suit as a party defendant? Some states require foreclosure "in equity", i.e., through a lawsuit. Others, such as Michigan, allow foreclosure by advertisement. This varies by state.

2. Exactly, how is the deed titled? "Grandmother and granddaughter...with rights of survivorship?"

3. If you're comfortable trying to understand the mortgage, check to see if it has a provision allowing deficiency judgments. This would allow the lender to sue if the foreclosure sale price doesn't meet the level of outstanding indebtedness on the mortgage. The suit is for the "deficiency". It may be that the lender is overreaching trying to get a deficiency judgment against you.

4. Order your credit reports from all three credit reporting bureaus by placing a 90 day fraud alert. You'll get confirmations with code numbers for ordering your reports. See if there are entries of the mortgage as having been listed as a debt of yours.

5. Some lenders are especially aggressive, and this may be one.

6. Regardless, if you are named as a party defendant in any suit for foreclosure, you will need to defend yourself. A bankruptcy attorney might be appropriate, but better yet is if you could find an attorney who does practice foreclosure defense.

You could also check local senior centers for free legal advice, talk to one of the attorneys and ask for recommendations to someone with foreclosure defense experience who could help you.

7. If you are falsely sued, you can hire an attorney to countersue and ask for damages - emotional and financial.

It would help if you had time to answer the questions posed, as I suspect there's some information missing from the whole situation (that's not an criticism, but an observation based on what you're related).

You are probably being listed because you are the person who now owns the property they are trying to foreclose on. If I were you, I'd ask an attorney whether this can impact your credit. In my opinion, it should not affect you if you're not party to the mortgage, but I'd get expert advice if it were me. And it likely will be me in a few years, because I'm listed on the deed to my mother's house but not the mortgage. My understanding is that I can't be held liable for the debt, but that doesn't mean the house can't be foreclosed.

How is it you are listed on the deed and not on the mortgage?