The normal lending sources such as banks, credit unions or mortgage banking companies just don’t fund loans to probate. The procedure of making a loan to a probate estate is simply using the assets of the estate to secure a loan. The loan is not qualified as to credit and income as the decedent of the estate is dead. The beneficiaries do not YET own the assets of the estate since a probate requires a Writ of Final Distribution prior to ownership being transferred to the ultimate beneficiaries. When the estate is in the probate process, ownership to the assets remains invested.
Any probate loan that is funded is not the obligation of any of the beneficiaries, but may become a liability of them if at such time they inherit a property that is secured by a probate loan. However many probate loans are often structured to have the loan paid off prior to the distribution of the asset to the final beneficiary.