I am the administrator of an estate in upstate New York. Unfortunately, there is effectively no money in the estate which would allow me to hire a lawyer, so I'm hoping you folks can help.
By the time I found out about the passing, the house had lain fallow for six months. There were break-ins, burst pipes, the cops had been called multiple times but openly refused to investigate (we actually had a voicemail where the police officer explained that they didn't bother investigating reports of looting for that property anymore) which also meant there was no way to file reports with the police to report the stolen goods because they outright refused to have anything to do with the place.
The house had been refinanced six months before the passing. By the time I came on the scene, the house was in ruins and the refinancers were going crazy from lack of feeding- er, payment. I tried to ask for a stay from them, explaining the circumstances, and that I was trying to get the various paperwork and such in order. They conveniently lost almost every single document I sent them at their request, and when they did manage to track them down, would dispute them.
Meanwhile, the insurance company (as an aside, we were more assuredly not in good hands, they made the whole process into a nightmare and if I had the money I would sue them for fraud) eventually paid out a check for the personal items and a check for the damage to the house. The former went into the estate account, the latter went to the mortgage company. A week before that resolution, the lenders announced that they were foreclosing on the property.
An hour ago, I was served with the foreclosure paperwork. I don't particularly see anything that I could do to stop the foreclosure (in part because I'm not really sure what I could do, and I also live several states away so showing up in court would be difficult), and none of the heirs particularly wants the place, especially now, so there doesn't seem much point in fighting it.
So. The money from the insurance company to pay for repairs for the house is a substantial percentage of the mortgage on the house ($45,000 on a mortgage of ~$110,000). Assuming the house is foreclosed upon and presumably sold, what happens to the money? Can the loan company do what they want with the money, use it to fix up the house? Or can they short sale it and pocket the difference? What are my options here? Is the estate entitled to any money left after selling the house assuming the sale price plus the insurance money is above the mortgage loan balance?