hard · National Real Estate Exam
In a lien-theory jurisdiction, an owner holds a property as a joint tenant with two others.
If this owner takes out a second mortgage on their interest and then dies intestate, what happens to the deceased owner's interest?
- The joint tenancy automatically converts to a tenancy by the entirety for the remaining owners.
- The interest passes to the surviving joint tenants by operation of law, potentially extinguishing the lender's security interest.
- The lender may foreclose on the entire property to satisfy the debt of the deceased joint tenant.
- The interest passes to the deceased owner's heirs, who become tenants in common with the survivors.
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