Most standard residential mortgages include what's called a "due on sale clause" which allows the lender to demand repayment of the loan in full if the ownership is transferred to anyone other than the borrower. However, there is a federal statute which exempts certain types of transfers from the due on sale clause, including some transfers to family members and to certain types of trusts. She should consult with an attorney to review your mother's mortgage and the federal statute to determine how she may be able to transfer the property to you without violating the due on sale clause.
Many mortgage agreements have a due-on-sale clause, which means that when ownership of the property is transferred the full amount of the mortgage becomes due and payable. Before your mother deeds her home to you, an attorney should review the mortgage documents to determine what effect a deed transfer may have.
You may also want to speak to an estate planning attorney regarding the reasons for wanting to transfer the property in the first place. There may be other ways to accomplish your and your mother's goals.
When I hear this scenario, I immediately wonder what is the reasoning behind the transaction, whether your mother has considered the risks that are created, whether she has considered the possibility that she might need to sell the house or obtain a reverse mortgage someday, etc., what the implications are for Medicaid planning, etc.
Your mother should sit down with an elder law or estate planning attorney to discuss all these issues before she does anything.
E. Alexandra "Sasha" Golden is a Massachusetts lawyer. All answers are based on Massachusetts law. All answers are for educational purposes and no attorney-client relationship is formed by providing an answer to a question.
Under the Fannie Mae mortgage form, the bank has to be notified and assent to your mother addding you as an additional owner of the property. If she does this without the lender's assent, she is tecnically in violation of the terms of the mortgage, although these types of transfers happen quite often without the lender being advised. The best practice is to ask the lender and get written consent.