The loan is repaid by the remaining joint tenant according to its terms. The law prevents the lender from calling the loan due pursuant to a due-on-sale clause, provided the loan is secured by a lien on residential real property containing less than 5 units.
See, Garn-St. Germain Depository Institutions Regulation Act, 12 U.S. Code § 1701j–3 - Preemption of due-on-sale prohibitions
“(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety….”
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