See How Much You Could Get

Instant ARLO™ Quote With Real-Time Rates & Limits. (No SSN or credit pull)

Your info is private and secure.

Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in mortgage banking, with the past 20 years devoted exclusively to reverse mortgages. A Forbes Real Estate Council member, he developed the industry's first fixed-rate jumbo reverse mortgage and has been featured in Forbes, Kiplinger, the LA Times, and Yahoo Finance. (License: NMLS# 14040)

Cliff Auerswald, President of All Reverse Mortgage, Inc., and co-creator of ARLO™ — the industry's first real-time reverse mortgage pricing engine — has 27 years of experience in mortgage banking, with 20+ years focused exclusively on reverse mortgages. A recognized expert in reverse mortgage technology and consumer education, he has been featured in Kiplinger, Yahoo Finance, Realtor.com, and HousingWire. (License: NMLS# 14041)

HEIRS

6 Steps for Heirs — How to Repay a Reverse Mortgage After Death

Heirs who inherit a home with a reverse mortgage can follow six steps: find the most recent loan statement, ask a senior real estate specialist about the home's market value, secure title (often through probate), and decide whether to keep the home, sell it, or walk away. Then tell the lender your plans and, if you won't keep the house, handle personal belongings and an estate sale.

By Michael G. Branson, CEO · Edited by Cliff Auerswald, President

By Michael G. Branson

CEO · 45 yrs in mortgage banking

Edited By Cliff Auerswald

President · All Reverse Mortgage Inc.

Michael G. Branson, CEO of All Reverse Mortgage, Inc. and moderator of ARLO™, has 45 years of experience in mortgage banking, with the past 20 years devoted exclusively to reverse mortgages. A Forbes Real Estate Council member, he has been featured in Forbes, Kiplinger, the LA Times, and Yahoo Finance. (License: NMLS #14040)

Cliff Auerswald, President of All Reverse Mortgage, Inc. and co-creator of ARLO™ — the industry's first real-time reverse mortgage pricing engine — has 27 years of experience in mortgage banking, with 20+ years focused exclusively on reverse mortgages. (License: NMLS #14041)

Published Mar 11, 2024 Updated Apr 6, 2026 ⏱ 14 min read ✓ Fact Checked HUD-Lender #26031-0007 93 comments About the authors

Table of Contents7 sections

• Step 1: Accessing Your Most Recent Reverse Mortgage Statement

• Step 2: Engage with a Senior Real Estate Specialist

• Step 3: Securing Title

• Step 4: Decide If You Wish to Sell the Home or Walk Away

• Step 5: Communicating Your Intentions to the Reverse Mortgage Lender

• Step 6: Handling Personal Belongings and Estate Sale Preparations

• Top FAQs

Inheriting a property is a significant responsibility, especially when it comes with a reverse mortgage attached. If you find yourself as the heir to a borrower who has passed away, you may feel overwhelmed by the financial and legal complexities that follow.

This article will guide you through the steps we recommend following to navigate this situation. Whether you’re considering paying off the loan, selling the property, or taking on other options, our aim is to provide you with a comprehensive understanding of your options and the next steps involved.

Let’s explore how you can effectively handle a reverse mortgage after a borrower’s death:

Step 1: Accessing Your Most Recent Reverse Mortgage Statement

Finding Your Latest Statement — Begin by locating the most recent statement for your reverse mortgage. This document is crucial as it contains essential information about your current mortgage status.

Understanding Your Statement — Once you have your statement, it’s important to comprehend the details it provides. We offer guidance on interpreting the information in your reverse mortgage statement here.

Why It’s Important — A clear understanding of your statement will inform you about your outstanding loan balance, interest rates, and other relevant financial details. This knowledge is vital for making informed decisions about managing or resolving your reverse mortgage.

Step 2: Engage with a Senior Real Estate Specialist

Reaching Out to a Specialist — Connect with a senior real estate specialist in your area. Their expertise in real estate matters related to senior homeowners is invaluable, whether you’re considering selling your home or not.

Assessing Your Home’s Market Value — Even if you’re not planning to sell, it’s beneficial to understand the potential market value of your property. An elder real estate specialist can provide a realistic estimate of what your home could fetch in the current market.

Additional Services and Support — Beyond property valuation, these specialists can offer guidance on various aspects of estate management. This includes assistance with organizing and conducting estate sales, should you require such services.

Why This Step Matters — Gaining insights from a real estate specialist can help you make more informed decisions about your property. Whether for future planning, considering a sale, or understanding your estate’s value, this professional advice is crucial in navigating your estate options effectively.

Step 3: Securing Title

The Importance of Holding Title — Ensure that you have legal title to the property. This step is critical, especially if you’re considering selling the property or transferring its title to someone else, such as a family member or a third party.

Navigating the Probate Process — In many cases, transferring title requires going through the probate process. This is particularly true if the property is part of an estate following the owner’s passing. Probate is the legal procedure of transferring property ownership after death.

Consulting with an Estate Attorney — It’s advisable to seek the services of an estate attorney to guide you through this process. If the original borrower had legal representation, contacting their attorney could be a beneficial starting point, as they might already have relevant background information about the property.

Step 4: Decide If You Wish to Sell the Home or Walk Away

Keeping the Home — If you opt to keep the house, you’ll be required to settle the mortgage balance. However, if the outstanding mortgage amount exceeds the home’s current market value, you are generally only obligated to pay 95% of its market value.

Selling or Transferring the Property — Should you decide to sell the home or transfer it to a family member, involving the elder real estate agent and ensuring the title is in your name are key steps. These actions will streamline the process and set a clear direction forward.

Understanding the Implications of Walking Away — Walking away from the home means allowing the lender to take possession of it. This decision should be made after carefully considering your financial situation and future housing needs.

Step 5: Communicating Your Intentions to the Reverse Mortgage Lender

Initiating the Conversation — It’s important to proactively contact your reverse mortgage lender, especially after deciding on the property. While the lender might already be aware of the borrower’s passing, you must convey your plans regarding the property.

Timing and Preparedness — If you’ve formulated your plan of action — to sell, refinance, or transfer the property — it’s advantageous to inform the lender as soon as possible. This is particularly important if they haven’t contacted you about the due and payable loan.

The Lender’s Role in the Process — Keep in mind that the lender has specific responsibilities to fulfill on their end. These may include property appraisals, communicating with HUD, and other administrative tasks. By informing them of your readiness to proceed, you can help expedite these processes.

Providing a Letter of Intent — A formal letter of intent can be a useful tool in this communication. It clearly states your plans and intentions, offering a tangible reference for you and the lender as you navigate the next steps.

Step 6: Handling Personal Belongings and Estate Sale Preparations

Preparing for Property Transition — If your assessment leads to the conclusion that selling the property isn’t financially viable and you choose not to retain it, it’s time to prepare to vacate the home. Start by removing all personal items and belongings of your loved one that hold sentimental or financial value to you.

Coordinating with Estate Sale Professionals — Once you have taken what you wish to keep, the elder real estate professional you’ve consulted can likely refer you to an estate sales expert. These professionals specialize in managing the sale of remaining personal items within the home.

Conducting an Estate Sale — The estate sales team will organize and execute the sale to liquidate the items you’ve chosen not to retain. Their pricing, marketing, and selling expertise can significantly ease this process for you.

Handling Post-Sale Procedures — After the sale, the estate sales professionals will typically oversee donating any unsold items. This step clears the property, can contribute to final expense payments, and potentially provide tax benefits.

Consulting a Tax Specialist — It’s advisable to consult with a tax professional regarding the estate sale and donations. They can guide you on the necessary receipts and documentation to file final tax returns and maximize applicable tax advantages.

Ensuring a Smooth Transition — This process is essential for a smooth transition away from the property, ensuring that personal belongings are respectfully handled and the property is cleared for its next phase.

Top FAQs

Do you have to repay a reverse mortgage?

Yes, a reverse mortgage is a loan, just like any other, requiring repayment. No payment is required on a loan for as long as at least one of the original borrowers (or an eligible non-borrowing spouse) on the loan continues to live in the home and pay the taxes, insurance, and other property charges (i.e., HOA dues) on time. The loan becomes due and payable after the last borrower or eligible spouse leaves home, but you can make payments before that time with no prepayment penalty if you desire (but it is not required). The great thing about reverse mortgages is that you can choose when and how you repay the loan.

Can you pay back a reverse mortgage early?

Yes, you can. You can make full or partial payments if you choose to do so. Reverse mortgage loans do not have any prepayment penalties.

What happens if you don’t pay back a reverse mortgage?

A reverse mortgage loan is only due and payable when no original borrowers or eligible spouses are living in the home or if you fail to pay your property charges promptly. If the balance is not paid off through a sale, refinance, or other acceptable funds, the loan will go into foreclosure like any other loan. Still, the loan is a non-recourse loan, meaning the only security the lender has is the property.

Can heirs walk away from a reverse mortgage?

The heir(s) to a home with a reverse mortgage loan can walk away from a property if that is their wish. A reverse mortgage loan is a “non-recourse loan,” which means you can never owe more than the home’s value. Suppose an heir inherits a house where the accrued balance was to be higher than the current home value. In that case, they can sign the property over to the lender servicing the loan without any further obligation to the lender.

What happens if you inherit a house with a reverse mortgage?

The first step for any heir would be to ensure they have the right to speak with the lender. Most lenders cannot talk with a third party about a loan unless that individual has authorization from their borrower in advance or they are the new title holder. Therefore, if you know in advance that you are to inherit a property with any loan on it, you should speak with the owner and verify that there is a trust naming you as the successor beneficiary and that they add you to the title in advance or that they at least write a letter to their lender authorizing you to speak with them and them to you on all matter relating to the loan. Next, take immediate steps to determine what you wish to do with the property. Remember, you cannot sell or refinance the home until you own it, which may require probate. The reverse mortgage will be due and payable, and the lender will be looking to see that you are taking positive steps toward retiring the loan (paying off the loan with your funds or a new loan in your name or selling the property and paying it off with the sale proceeds). If the loan balance is higher than the current value, you also have the option to pay the loan off at 95% of the current market value or the amount owed, whichever is less. Still, you need to be sure you can obtain a new loan for 95% of the value if you do not have the funds readily available. If you do not wish to keep or sell the home, you may contact the lender and let them take the property and owe the lender nothing. To deed the home to the lender, you must have the title. Otherwise, the lender can begin a foreclosure action (which does not affect you or your credit).

How do I find the company that services my parents’ reverse mortgage?

Mom should be getting monthly statements from the new servicer. The quickest would be to check her home to see if she has any statements at the house. But if she doesn’t have any, you can go to two other places to get this information. You can try contacting HUD at answers@HUD.gov or 800-CALLFHA if you have the Case Number to ask them who the lender and servicer are for the loan. They will probably ask you for verification that you are the heir, and you have the right to receive the information, but that’s one way. The Case Number can be found on all the loan documents, and if you do not have access to their documents, it will also be printed on the Deed of Trust or Mortgage that is recorded at the county recorder’s office for the property. You can also contact MERS (Mortgage Electronic Registration System) as the loan is in their system, and instead of an assignment being recorded at the county recorder’s office, an electronic assignment is done through MERS. Every loan now has a MIN number (Mortgage Identification Number) also on the Deed of Trust or Mortgage that is used by MERS to track the loan when it is transferred from lender to lender. MERS offers a free service to allow homeowners and heirs to find their servicer by property address, Borrower’s name, and social security number, or by the MIN number. MERS may be the easiest way to find the information you need, but you will also need to verify that you have authorization to receive the information, or they will not assist you. That site is https://www.mersinc.org/homeowners/mers-servicerid. Mom can grant you authorization with a written letter if she is still living. If not, you will need to show them proof that you are her heir (daughter) and that you are the heir who has the authorization to receive the information. Lenders and HUD do not want to get between feuding relatives, and they have no way of knowing who the heir with the authority to speak for the estate if they have not previously received authorization from the borrower unless you send them something signed by the borrower or other recognized documentation.

How can I prove I am the heir to my mother’s house?

The lender does not determine the heir. Your mom would have done that before she passed, or it would be up to the legal process after she passed. If your mom established a will or a trust, you should take that documentation to an estate attorney. They could help you go through the process required in your area to change the property’s title to your name. It may require court probate to complete. If your mom passed away without a will or trust, then it would most certainly require a court to make that determination (especially if there might be any other possible heirs). Again, you should seek the assistance of a licensed estate attorney to help you with this process.

Can heirs pay down the loan and make monthly payments on the remaining reverse mortgage?

Unfortunately, that is not possible. However, if you consider paying down the loan, you can use the same funds to refinance the property into a traditional loan. HUD allows heirs to pay off the loan at the current balance or 95% of the current home value, whichever is less. This should make obtaining new financing more accessible.

Can I keep my mother’s reverse mortgage if I can’t secure financing?

The reverse mortgage is not assumable. It was never intended to be a multi-generational loan. When the last borrower on the original loan vacates the home, the loan becomes due and payable. Heirs should be aware that once the borrowers no longer reside in the house, they will need to either pay off the loan with available funds, refinance the loan with a new one if they wish to keep the house, or sell the home and use the sale proceeds to pay off the loan. You could qualify for your own reverse mortgage if you are of sufficient age. Alternatively, heirs may allow the lender to repossess the property, owing nothing regardless of the loan’s balance. It’s important to act promptly as your time to decide is limited. If selling the home is necessary, bear in mind it may take some time, so it’s advisable not to delay until the last moment.

How long does a reverse mortgage lender take to accept a Deed in Lieu of Foreclosure?

Before considering a Deed in Lieu of Foreclosure, the lender must complete several preliminary steps. First, you must hold the title to transfer it via a deed to someone else. The lender then needs to ensure that the property is vacant of personal possessions and is “broom clean.” Additionally, there must be no other liens or mortgages against the title. Accepting a Deed with existing liens means the lender would also take on them, unlike in a foreclosure action, where such liens might be cleared unless the creditors choose to settle the reverse mortgage debt to acquire the property themselves, which is rare. These procedures can take months or, in some cases, may never be completed, necessitating a foreclosure. The most effective approach is to keep communication lines open with the lender.

Is there a penalty for leaving personal belongings in a house that we will let go into foreclosure?

The lender will remove and discard any remaining items in the property without penalty to the estate or heirs. However, our advice is to contact an estate sale company and let them look to see if they think it is worth their time to conduct a sale. We have two different reports from people who did not think it was worth their time or effort with the remaining items, but the estate sale companies in those instances found enough to conduct the sales, and it ended up paying both some additional money (not to mention paying for the estate sale). In addition, the estate sale company donates the remainder of the personal items not purchased at the end of the sale. It obtains receipts for the donated items, which also helps the families with the final tax returns.

Is adding an alternate contact sufficient to converse with the lender and sell my home?

An alternative contact does not authorize them to talk on behalf of your loan. You can do some things now to ensure your interested party can contact the bank at home when the time comes. Firstly, you can add this person to the title at any time. By adding them to the title now as a joint title holder, they would have the right to sell the home as the lone title holder after you pass. This would not affect your loan as your loan documents specifically state that you may add anyone else to the title as long as you remain on title and live in the home. Secondly, you can send a letter to your lender and authorize them to speak on all matters relating to the loan. This authorization will allow them to discuss all matters related to the mortgage, and there will not be a typical delay. At the same time, they need to verify his authorization to speak with them on your behalf. You may even want to talk to your attorney about setting up a trust with a power of attorney to allow your 3rd party to take any steps necessary should you become incapacitated or he needs to act on your behalf before or after you pass. An estate attorney can explain when a Power of Attorney will and will not remain in effect and when he will be acting as the executor of your estate). Once your forms are completed, you can submit them to the lender for approval.

Need Help Navigating a Reverse Mortgage After a Loved One’s Passing? Get expert guidance from All Reverse Mortgage, Inc. (ARLO™) — America’s #1 Rated Lender with a 4.99/5-star rating! Call (800) 565-1722 or click here for your free consultation — simple, trusted, 100% secure!

Reverse Mortgages: Options for Heirs & How Lenders Handle Foreclosure

ARLO recommends these helpful resources:

America's #1 Rated Reverse Lender Celebrating 20 Years of Excellence.

Have a Question About Reverse Mortgages?

Look no further. Michael G. Branson, our CEO, brings a wealth of knowledge directly to you. With a robust 45-year tenure in mortgage banking and 20 years dedicated solely to reverse mortgages, he's the expert you want on your side.

Post your question in the comments below and anticipate a personalized response from Mr. Branson himself, typically within one business day. He's here to illuminate all angles of reverse mortgages, ensuring you're equipped with the knowledge to make informed decisions. Take this opportunity to gain insights from a seasoned professional.

Over 2000 of your questions answered by ARLO™
Ask your question now!

93 Comments on this Article

Dawn
March 26th, 2026

How does an heir pay off a reverse mortgage if they have nothing in savings and don't qualify for refinancing?
Reply to Dawn
- Michael Branson
  March 26th, 2026
  
  Hello Dawn,
  If you do not have the wherewithal to obtain financing to retire the debt on the home, your remaining option is to sell the house and keep the equity. Your benefactor (usually parents or grandparents but it can be anyone who has a reverse mortgage on the property, most likely needed the loan to support their ability to remain in their home. But the loan requires no payments for as long as the borrower lives in the property as their principal residence.
  Since reverse mortgages are not multi-generational loans, once the last original borrower on the loan permanently leaves the property, the loan becomes due and payable. Heirs can pay the loan off and keep the property with other funds available to them or they can refinance the loan with a new loan in their name but if they are unable to obtain said financing and do not have those funds available, they are left with the options of selling the home if there is still equity in the property or if the existing loan is greater than the value of the property, they can always walk away and owe nothing.
  You need to assess the equity position of the property and determine the best next step for you. Based on your comments (that you have no funds available and cannot quality for a refinance to pay off the loan), if there is equity in the property, the sooner you sell it the more money you will receive from the sale. The loan keeps accruing interest until it is repaid so the sooner you can sell the home and repay the balance owed, the more money you will walk away with. If you plan to allow the lender to take the home back because there is no equity, your timeframe is yours to determine until the lender forecloses because you will not be required to repay any amounts owed regardless of any additional interest that accrues.
  Reply to Michael
- Michael Branson
  March 26th, 2026
  
  Hi Linda,
  This is a great question and I am glad you asked it. As the name implies, the set aside is for the "expected life” of the borrower. Some borrowers will exceed the life expectancy charts, some will not live that long. HUD can't require lenders to set aside enough funds to pay taxes and insurance until every borrower reaches the age of 110 years of age because a few will live that long and if they required a set aside that large, most borrowers would not receive any proceeds with their loan as they would all be set aside for payment of taxes they will never be old enough to owe.
  All borrowers with a set aside need to realize that if they live long enough, they can outlive their set aside. Therefore, they should begin putting some money away or leave money available in their line of credit for that eventuality if they do not think their income will cover their living expenses plus taxes and insurance when the LESA is exhausted and they must begin to make those payments again.
  Remember, this is your house and the taxes and insurance are always your responsibility. When you have a LESA, the lender agrees to set funds aside to pay those charges for the youngest borrower's life expectancy but when those funds are gone, those costs are still your responsibility. Knowing that when the loan starts should give you years to decide how you're going to handle the costs when they are no longer being paid from set aside loan proceeds. And in all honesty, if you think that expense is beyond your ability to plan for or pay and you believe your family longevity is likely that you will outlive the LESA, you may want to think hard before agreeing to close a reverse mortgage with a LESA.
  Reply to Michael
Valerie D
April 2nd, 2025

Hi, I recently got a reverse mortgage through ARLO. I don't have any biological heirs, but my will leaves my house to a non-profit organization.
I looked into probate in Washington State, and it appears the process could exceed the allowed one-year timeframe (6 months plus two 3-month extensions) before foreclosure may be initiated.
Assuming the home is worth more than the loan amount I owe (it was appraised at $514K, and my initial loan amount is about $20K), and the house is foreclosed on - would the proceeds remaining after the sale go to the non-profit?
Alternatively, could the non-profit pay off the loan and sell the home themselves without going through probate? Or would probate prevent the foreclosure until the non-profit is permitted to sell it?
Also, how do I designate the non-profit as an authorized party so they can access information about my loan after I pass?
Thank you!
Reply to Valerie
- Michael Branson
  April 7th, 2025
  
  Hello Valerie,
  The lender will typically work with heirs - or designated beneficiaries such as a non-profit - who are trying to sell a property. Often, there's quite a bit that can be done before probate is finalized to begin the sale process.
  That said, I'm not an attorney and I'm not familiar with the specifics of your probate process in Washington State, so I can't offer legal advice. You should absolutely speak with an estate or probate attorney to:
  Understand what steps are needed to ensure the title passes correctly,
  Determine how the non-profit can be granted the legal right to list and sell the home, even during probate,
  Explore how they can request delays or "stays” in the foreclosure process if needed, allowing sufficient time to complete probate and the sale.
  This might all be a moot point if the value of the home doesn't warrant a sale - but based on your numbers, it sounds like there could be substantial equity to preserve for the non-profit.
  As for designating them to access your loan information, you should contact your loan servicer directly and ask about adding an authorized third party to your file. This often involves submitting a written authorization form.
  Better to prepare ahead of time - and I commend you for thinking this through proactively.
  Reply to Michael
Deborah K.
February 18th, 2025

My friend's husband just passed away. She is on the deed to the house but not on the mortgage note. Can she get a reverse mortgage and pay off the existing mortgage?
Reply to Deborah
- Michael Branson
  February 18th, 2025
  Hello Deborah,
  If she is on the title to the property, she can take out a new loan, including a reverse mortgage, to pay off any existing liens her deceased spouse had on the home.
  Since she is now the sole property owner, the existing lender cannot stop her from paying off the loan. However, she will need to meet the eligibility requirements for a reverse mortgage, including:
  I recommend she speaks with a reverse mortgage specialist to determine if she qualifies and to explore the best options for her situation.
  Reply to Michael
  - Karen S
    March 15th, 2025
    
    Michael, My wife's mother passed away on July 28, 2024. My wife is an only child and sole heir. She was named in her mom's will as the person to handle her mom's affairs related to her personal property and estate. Her mom had a reverse mortgage with compulink. We received the letter from compulink giving us our options on settling her mortgage we took the time to speak with a realtor and saw that more was owed on the loan than we could get through a sale so decided to go with the deed in leiu of foreclosure. We informed compulink and provided the documentation requested. Around September 15, 2024, we got a letter from compulink saying how they would proceed with deed in leiu and that it could take 90 to 120 days. We received spotty communication from them asking for more forms and information which was always returned to them within 24 hours of their request. We would call to get updates or leave messages and only twice since 9/15/24 has anyone returned a call. In the meantime, we have been paying the monthly hsa fees, utilities, insurance and we had to pay back compulink the the second half property taxes that they paid. Are we being duped? We live in Minnesota and cannot have the heat turned off even in a vacant house as water pipes will freeze and bust. In addition, we are well over 120 days and we have finally heard from. Them through another letter telling us what our options are with the property and when we were finally able to speak with someone, they said the house was not vacant because there was a car in the driveway and a man cutting the grass. This is a townhouse property with an hsa and he was the groundskeeper. This was back in the fall and they never informed us of this until a week ago. Now they are saying that they are moving on this, re-explained the process and said it could take 90 to 120 days. We are super frustrated and we are wondering why we are paying for the hsa etc. We have already paid over $4500 on bills and are questioning whether or not we really needed to. We feel like we are throwing money out the window and getting absolutely nothing in return. Who is supposed to pay for these things? Compulink has told us the the loan needs to be in good standing with no leins etc. Do we have any recourse for compensation. Please respond. We are trying to do the right thing but this doesn't feel right.
    Thank you.
    Reply to Karen
Vicki
September 4th, 2024

Mother passed away on July 26. She left no will or plans indicating that the home would be left to heirs. We've notified the lender. We do not want the home and don't plan to handle selling it. They can foreclose. Other than vacating her belongings, is there anything else we should know? The company keeps mentioning the deed, but I have no idea where it is! Mother outlived the reverse mortgage term, and I truly have no idea what is going on. I just learned about the reverse mortgage about 10 years ago. Mother took out the reverse mortgage in 2009. My siblings refuse to deal with this mess. Any suggestions?
Reply to Vicki
- Michael Branson
  September 4th, 2024
  
  Hello Vicki,
  Do I have ideas? You bet! First off, I'm not sure where the property is located, but in many areas of the United States, property values have appreciated significantly since 2009. Depending on when your mother took out the loan, it's possible she did so just before or after the market crash, which may mean there is still equity in the home today. If the property is in an area with higher appreciation rates, there could be a good amount of equity left. Before making any decisions, it's crucial not to simply turn the home over to the lender until you're sure of the current value. There are a few easy steps to find out, and I can offer some guidance to help you make an informed decision.
  First, I recommend finding out exactly how much your mother owed on the loan. While you're getting that information, contact a senior real estate specialist in the area. These agents are familiar with handling estates and can often assist with estate sales if you need to clear out personal belongings. If there are enough items for an estate sale, they usually work with a company that will organize the sale, clean up unsold items, and prepare the home for listing. Once you know the payoff amount from the lender, you can decide if it's worth selling the home or letting the lender take it if there's no equity. Either way, you'll have spent just a little time and effort, but you'll have the information to make the best decision. If there is equity, you can start working with the agent to prepare for a sale. Negotiate with the agent to stage the home, and you may not even need to be there - they can handle everything, including inspections and the sale.
  Also, be sure to factor in probate services when considering the equity. If the equity is small or negative, you can move forward with your plan to let the lender take the home. However, if there's a significant amount of equity between what's owed and the home's value, you'll need to consult a probate attorney. Since there's no will, the court will decide who receives the house (and any equity), and it's possible creditors could be involved. Your attorney will determine all this fairly quickly, and you can notify the lender if you decide to move forward with the probate process. The lender will typically allow you time to complete probate, and your real estate agent should be familiar with handling this. It's not uncommon for homes to be sold just as the probate process is completed.
  The deed the lender is referring to is the document transferring the property from the current owner (your mother) to the lender. It's not a document that already exists, but one that would need to be created and properly executed before sending it to the lender. I find it a bit unusual that the servicer is asking for the transfer document so soon - usually, these things sit with the servicing department for months before any action is taken. Since your mother passed away on July 26th, it's been about a month, and they're already asking for a title change, which is quite fast. Before you agree to transfer the title, I strongly recommend checking the value of the property compared to what's owed.
  Reply to Michael
- Lynn F.
  November 10th, 2024
  
  Heir of parents estate and executor. Need guidance. Minimal funds available to pay debts. We want to foreclose and walk away from the home and impending responsibilities. After reading these, where is the deed? I assumed the reverse mortgage loan meant HUD keeps the title until it's paid. I know they had title to the land, which was paid off, but they now owe $308K, and it's increasing. Houses in the area might sell for $330K, but with debtors owed, hassles, costs, etc., we've determined it's best to hand the house back to the bank.
  We've cleared the house except for a couple of items. Can I just notify Compulink and tell them to take over in foreclosure and be done? What do I need to know about taxes or what happens if there aren't enough funds to satisfy all debts, which I'm unsure of, as I don't know the amounts owed to tax and other debtors? Can I get into legal trouble or face repercussions as the executor? Is there a specific order to pay debtors in foreclosure? Do I need an attorney, and where would those funds come from with a foreclosure? What's the difference between notifying for straight foreclosure versus a Deed in Lieu of Foreclosure? Thank you.
  Reply to Lynn
  - Michael Branson
    November 13th, 2024
    
    Hello Lynn,
    While I cannot provide legal or tax advice, I can shed some light on the process.
    Your parents always owned the home, and the title remains in their name today. The estate still owns the house, not the reverse mortgage company. The deed is not a vital document for proceeding. The title can be verified and transferred through the title company and the county recorder without the original deed. Your parents may have it among their documents, but you will likely use a Grant Deed or a Deed in Lieu of Foreclosure to transfer the property at this time. If the lender forecloses, they might take title using a Trustee's Deed upon Sale.
    As the heir, you have three choices:
    1. Keep the home: This requires arranging to repay the loan.
    2. Sell the home: You would need to cover the reverse mortgage debt at closing.
    3. Walk away: Notify the lender that you are not interested in keeping the property. In this case, the lender may proceed with foreclosure or work with you on a Deed in Lieu of Foreclosure.
    It's important to know:
    As the heir, you have no personal liability for the reverse mortgage debt. The loan is non-recourse, meaning the lender can only recover the amount owed from the property, not any other estate assets.
    The decision to foreclose or pursue a Deed in Lieu is entirely up to you. Foreclosure may protect the lender's interest in wiping out junior liens, while a Deed in Lieu might not provide the same protections for the lender.
    If you are the executor, you must follow state laws regarding how debts are paid. Generally, certain debts, like taxes, take priority, but the specific order can vary. Consulting with an estate attorney is crucial to ensure that you handle the estate properly and avoid any potential legal repercussions.
    In summary, if you've decided to walk away from the property, you can notify the lender. They will either foreclose or discuss the possibility of a Deed in Lieu with you. Foreclosure and Deed in Lieu are both options to settle the debt, but the choice depends on your preferences and the lender's requirements.
    I strongly recommend consulting an estate attorney for detailed guidance, especially if you're uncertain about the debts or the estate's financial obligations. They can help you navigate the legal aspects, including taxes, debt payment order, and your responsibilities as an executor.
    Best of luck with this process!
    Reply to Michael
  - Michael Branson
    November 13th, 2024
    
    Hello Lynn,
    I can't give you legal or tax advice but I can she some light on the process. Your parents always owned the home and the title is still in their name today. The estate still owns the house at this time, not the reverse mortgage company. The "Deed" is not an vital document to proceed, the title can be verified and transferred without that document through the title company and the county recorder. Your parents may have it with their documents somewhere but you will most likely use a Grant Deed or a Deed in Lieu of Foreclosure to transfer the property at this time (and if the lender forecloses, they might take title using a Trustee's Deed upon Sale).
    As the heir, you have the choice to keep the home, sell it or walk away, but the loan is now due and payable. If you wish to keep the home or sell it yourself, you need to make arrangements to repay the loan. If you choose not to repay the loan, you can simply walk away, but then the lender would need to either foreclose to secure payment for the loan or arrange for a Deed in Lieu of Foreclosure with you if you are willing to do so but that is up to you. As the heir, you have no personal liability for the loan, and in fact, the loan is non-recourse so the lender cannot look to any other assets of the estate to repay the loan other than the property. As far as the reverse mortgage and the property goes, it's pretty straightforward. You can make the decision that is best for you and the lender has only the property as the security for their loan.
    Reply to Michael
Lisa
August 31st, 2024

Hello! I love all the great advice and recommendations here. It's all very helpful. My mom and dad got a reverse mortgage in 2010. My dad passed in 2012. My mom is 86 years old, has mild dementia due to old age but is otherwise healthy. I have durable power of attorney and am named executor of her estate when she passes. I am listed as the person to whom Novad can speak regarding all matters of the loan. However, I don't have my name added to the title. Where would I find the title, or who holds the title so I can have my name added? Thank you.
Reply to Lisa
- Michael Branson
  September 3rd, 2024
  
  Hi Lisa,
  The title is the deed that designates the owners of the property and is recorded at the county recorder's office. Changing the title now may require very little work, or it could be a bit of a chore.
  If your mom is still competent and can sign legal documents, she can most likely add you to the title. Since it sounds like the property is in a trust, you would probably need to visit her trust attorney to have the documents prepared. They can then record the documents to ensure the change is done in a way that doesn't trigger a reassessment of her property taxes. The attorney also needs to verify that she has a HUD HECM reverse mortgage. There's no issue with your mom adding you to the title as long as she also remains on the title and continues to live in the property as her primary residence. However, if she were to change the title so that she was no longer on it or no longer lived in the home, the lender would call the loan due and payable, so this is important.
  If your mom's dementia is severe enough that she is no longer competent, she would not be able to sign a deed to make the title change. She cannot grant title if she is not competent. I do not believe you could grant title to yourself as the PoA since that would be considered a self-serving act. You would need to discuss this with the estate attorney and a title company. If you participate in an act that places a cloud on the title, it might not achieve the desired results and could have consequences when you try to sell the property later.
  Finally, when you say you are "listed as the person...", if you are referring to the alternate contact, that gives you no authorization to speak to NOVAD or for them to discuss the loan with you. It merely serves as a name and contact information the lender can use to reach the borrowers if they are ever unable to do so. I would suggest that your mom write a letter immediately authorizing NOVAD to speak to you on all matters related to the loan. It also wouldn't hurt to have a copy of the POA on file with NOVAD so that when the time comes for you to act on behalf of your mom, you won't have to jump through hoops to get them to recognize your authority.
  Reply to Michael
Dianne
August 15th, 2024

Our Dad passed in January, and it was his wish for my sister and me to turn the house over to the bank. She has been dealing directly with HUD. In February, they stated they would take possession within 90 days. We emptied the house and had it ready by mid-May. We had to get heirship affidavits notarized and sent them to HUD in April. A month later, we were told they were incomplete, so we sent a second set to HUD in mid-May. We had been unable to contact anyone at HUD; after many phone calls, voice messages, and emails, we finally received a call back stating that the second set of affidavits was sent to the attorney on August 6! Now, we had to resend them today because the attorney wasn't able to open them. My sister is moving to South Carolina in September, and I live 3 ½ hours away from our Dad's house. We are beyond frustrated that we haven't been able to turn the house over to HUD like we should have in May and be done with it. Any suggestions? Why would HUD delay taking possession for months? There is plenty of equity left in the home, so we just can't understand this. Thank you.
Reply to Dianne
- Michael Branson
  August 18th, 2024
  
  Hello Dianne,
  If everything has been removed from the home and you're effectively done with it, my suggestion would be to relax and not worry about it. You have no more responsibility or expenses related to the home - let HUD handle it if you've decided to walk away at this point. You have no liability; it's their problem now.
  However, I do have a question based on your comments. If there is equity in the property, why not consider contacting a senior real estate specialist to sell the home? This way, you can keep the equity for yourselves. That equity belongs to your family, and if you sell the home instead of allowing HUD to take it, that money can be used for any expenses you may have had or simply kept by the family. A senior real estate professional can manage the staging and sale of the home with minimal or no involvement from you and your sister. Any proceeds above what is necessary to pay off the mortgage, after covering the costs of the sale, will stay with your family.
  Of course, the choice is yours. If you prefer to walk away and owe nothing, you can certainly do so. However, if there is equity in the home, you and your sister could retain that equity for your families, likely with very little personal involvement, with the help of a good real estate agent experienced in estate sales.
  Reply to Michael
Emily Cowley
August 6th, 2024

I have a question for you about a reverse mortgage.
My friend was living with her boyfriend in his house in Sacramento,CA. He had a reverse mortgage on the property, he had a massive heart attack last week and died in her arms.
How long do you think she has before she has to leave the property?
Thank you,
Emily Cowley
Reply to Emily
Tom D
May 1st, 2024

Dad died July 2022. We are near the end of a deed in lieu of foreclosure. We have been locked out of the home two weeks after death. Who is responsible for the back property taxes?
Reply to Tom
- Michael Branson
  May 5th, 2024
  
  Hello Tom,
  Any funds advanced by HUD, or the lender will become part of the foreclosure amount. When the home is sold, if it does not sell for an amount sufficient to pay for the outstanding loan amount, any costs associated with the foreclosure, and any funds advanced (such as taxes), that loss is included in the claim submitted to HUD.
  The borrower paid for mortgage insurance to cover losses on the loan, which is a non-recourse loan. That means that the security for the loan is the property itself. Neither the lender nor HUD can ever seek repayment from heirs or any other party for payment of any other monies under normal circumstances.
  Reply to Michael
James J.
April 17th, 2024

I need to find the payoff amount on a specific reverse mortgage FHA case number.
Reply to James
- Michael Branson
  April 17th, 2024
  
  Hello James,
  If you are authorized by the borrower or other legal means (legal heir, court, etc.) to receive this information, you can get it straight from the servicer. If you are not sure who the servicer is, you can check with HUD and get that information using that case number. However, if you are not legally authorized or do not have written permission from the borrower, the lender will not release this information to you.
  In fact, if you have no legal right to the information or written authorization from the borrower, a lender is forbidden to give any unauthorized party private information about the borrower's loan.
  Reply to Michael
Peter V.
January 8th, 2024

My mom passed away in July of last year. She has a reverse mortgage in place. We are trying to sell her house and have a contract on it. We were scheduled to close in 7 days but were informed by the title company that my mom's will have to be probated. This will delay the closing by at least 2 months. Here is my question? Can we let the buyers move in with a short term lease until we close on the home?
Reply to Peter
- Michael Branson
  January 8th, 2024
  
  Hi Peter,
  The lender could call the loan due and payable, but you're in the process of paying it off now, so that's probably not your biggest concern. Your biggest issue could be what happens if the purchase fell through, and you cannot get them back out. I cannot give you legal advice and would strongly suggest you obtain competent legal counsel to determine your upside and downside risks by allowing a potential buyer to take possession of the property before the closing.
  Reply to Michael
Martha J.
November 23rd, 2023

My in laws have a reverse mortgage. If my father in law dies first, she does not want the house. Can she sell it or turn the deed back to you?
Reply to Martha
- Michael Branson
  November 23rd, 2023
  
  Hello Martha,
  
  Your mother-in-law can sell the home at any time. I would suggest that she contact a senior real estate specialist to list the home and sell it if there is any equity in the home. After all, why walk away and let the lender take the equity that belongs to her? She can walk away from the home anyway if there is no equity, but the loan is intended for her to be able to live in the property for the rest of her life. She can continue living in the home payment-free even if the home is worth less than what is owed.
  
  If she walks away before being forced to move due to health or death and there is a loss on the loan. As a result, she would not be eligible for other government-insured lending programs unless the loss was repaid, even though the lender would never seek to recover those funds from any other assets of her estate. So yes, she can sell or walk away at any time, but again, I would strongly suggest that she research other options first. A good senior specialist in real estate may be able to list and sell the home without even requiring her participation and still capture some equity for her.
  Reply to Michael
Eddie R.
June 23rd, 2023

Hi Arlo,
My parents are co-borrowers on a reveres mortgage that is in good standing. Recently my dad has been ill, and we've been advised to shift the deed of the home to just my mother. Both of their names are on the deed to protect the asset. Will this be an issue for the reverse mortgage lender if we proceed?
Thanks! -Ed
Reply to Eddie
- Michael Branson
  June 26th, 2023
  
  As long as one of the original borrowers remains on title and lives in the property as their primary residence, the loan terms are still met, and they would be ok. However, if something happens to your mom and your dad is still living there after he comes off the title, the lender would still call the loan due and payable even though he was an original borrower after he was taken off the title.
  Reply to Michael
Judie
April 30th, 2023

We (myself and my siblings) are in the process of drawing up legal documents for our mother before she passes. Is there some template for drawing up her Will that addresses her home's existing reverse mortgage? If so, where can I find it?
Reply to Judie
- Michael Branson
  April 30th, 2023
  
  Hello Judie,
  
  I am sorry, but that would constitute giving you legal advice, and I cannot do that. I am forbidden by licensing law to give legal or accounting advice. I would always advise people to contact a knowledgeable estate attorney in the state where the property is located. If you are convinced that an attorney would be more expensive than you would be willing to incur, perhaps a paralegal or some site such as LegalZoom or another internet-type option?
  I personally believe that the cost of an attorney is a well-spent expense when you consider all the things that could go wrong that you may not even know about (especially if any other family members may have any claims to heirship, and I do not know in which state you are located). I wish you the best in whichever way you decide to proceed.
  Reply to Michael
Jen N.
April 14th, 2023

Hi Arlo,
My stepfather has two grown adult children, my brother and me. My mom and her husband both passed away a week apart. No one has legal power of attorney or is named executor of the house. They have a reverse mortgage and would have equity left over.
Suppose we choose to sell the house. I understand that the loan would be paid back, and then whatever money comes from the sale would go to the 4 of us. Are we to contact the mortgage company or someone else?
Reply to Jen
- Michael Branson
  April 14th, 2023
  
  Hello Jen,
  
  I cannot tell you who would get the money or how it would be split; that would be up to the courts to decide through a probate action. Any heirs can contact the lender to let them know you are starting the probate process, but I would also contact a probate attorney as quickly as possible to get that going.
  I don't know the laws in the state in which your mom and her husband lived, and I would not venture a guess as to the probate requirements even if I thought I did. That's as bad as trying to give someone legal advice when you are not an attorney, and I would not do that.
  An estate attorney can tell you the requirements, what you need to file, and what steps should be taken. I don't know if the attorney will want to contact your stepfather's heirs or check to see if they have already started the process or what. Are you sure they have not already filed if you have not spoken to them?
  This is why I would speak with an attorney sooner rather than later to ensure you do whatever you need to do and ensure the loan is paid promptly to protect the equity.
  Reply to Michael
Laura K.
January 22nd, 2023

Hi ARLO! We paid off the reverse mortgage our title company sent a check and Novad received it 12/2/2022. The payoff amount we sent was up to 12/21/2022. We overpaid at their request, and they sent a letter with payoff amount stating that any extra funds would be refunded. It's Jan 15th and I have called and sent Faxes and emails to payoff dept. about the refund but cannot get an answer. The Title company said they received the money 12/2 and the reverse mortgage is paid off, but they owe me the difference in interest from 12/3 -12/21. Do you know how long it takes to receive the overpaid funds? And where can I file a complaint? My mother passed she had the reverse mortgage there was a will and a trust. I am the executor of the will and the sole beneficiary of the will, and the trust and they have all the paperwork concerning this. And I have authorization to speak with them I've been speaking with them for many years, and I don't know why they're avoiding me on this issue of getting the overpaid money back. What can I do? Thank you! I just wanted to let you know too that reading all the questions and answers has helped me tremendously! I appreciate all that you do!
Reply to Laura
- Michael Branson
  January 22nd, 2023
  
  Hi Laura,
  
  Every state has laws in effect regarding payoffs and funds. I do not know what those timeframes would be in your case. You can look on your state's website to see what the laws express and can also see where complaints can be sent to your state if the lender is out of compliance with those state laws (and if you are forced to go that route, you might want to send a copy of that letter to senior management at NOVAD).
  Again, I don't know the exact timeframe that lenders must refund excess overpayments on loan payoffs, but I believe it can take up to 45 days to reach the borrowers. If you believe that the lender is not acting in good faith or is violating the law, the Consumer Financial Protection Bureau also accepts consumer complaints on a federal level when lenders do not act in accordance with Federal Finance Laws and you can start that on their website at https://consumerfinance.gov.
  It would be so much easier if NOVAD would just respond and let you know what was going on and I honestly do not know why they don't, but I hope you receive your refund soon.
  Reply to Michael
- Tina
  March 18th, 2023
  
  Novad changed hands in January I believe. I got a letter from them telling me the new company that was taking over their accounts. That's probably why you are not getting any response from Novad.
  Reply to Tina
Fawn Q.
September 30th, 2022

Upon passing away, do you have specifics on the will?
Reply to Fawn
- Michael Branson
  September 30th, 2022
  
  Hello Fawn,
  
  Lenders have only one avenue to gain ownership of a property and that is to foreclose on a defaulted loan and then to be the highest bidder at the foreclosure auction. There are several processes they would need to follow for that to happen and it if not a guarantee that they would own the property even if they do initiate a foreclosure proceeding. They must file a notice of default on the property if the borrower defaults on a loan which include filing, rights of redemption periods, a file period to pay the balance in full and then a sale date.
  Once the sale date is set, the Trustee on the mortgage documents will conduct a public auction and the first bid is the lender's which consists of the amount owed including any fees incurred for foreclosure costs and any money the lender has fronted for taxes, insurance, etc. on behalf of the borrower. If another purchaser bids a higher amount at auction than the lender's opening bid, the lender is now out of the auction, they cannot bid against subsequent bidders.
  
  When there is a will directing the property to go to heirs of the borrower or others, those individuals have the choice of paying off the loan and keeping the property, selling the home and keeping the property, or they can walk away and owe nothing but even then, unless they sign a Deed to voluntarily transfer ownership to the lender, the lender must still foreclose on the property as the lender does not automatically get title to the home.
  If you are the owner now and you are concerned about your heirs, you need to be sure they understand their rights as heirs of a property with a reverse mortgage in advance. If they wish to keep or sell the home, they will need to transfer the ownership so that they have the right to obtain financing to pay off the reverse mortgage that would be due and payable or to sell the home.
  If they do not want the home and are not interested in working to sell it, they are not required to do anything as the lender will eventually foreclose and cannot look to any other assets in your estate or to your heirs to pay anything else to pay off the loan.
  Reply to Michael
Rebecca P.
August 14th, 2022

Hi Arlo,
I was wondering if you could help me with a question I have regarding my mom's reverse mortgage? My mom had a reverse mortgage on her house, and she passed away a month ago. I contacted the lender and asked them to send me the documents showing the options for the heirs. They sent me a loss mitigation packet and I selected heir payoff and signed the documents and sent them back. They emailed me and said my application was denied because the appraised value was higher than the loan payoff. Now I don't understand what options I have. Please help. Thank you!
Reply to Rebecca
- Michael Branson
  August 16th, 2022
  
  Hello Rebecca,
  
  They denied you for loss mitigation because the house still has equity. In other words, there is no loss. Reverse mortgage heirs have the right to repay a loan at the amount owed or 95% of the current market value of the property if the home is worth less than the amount owed and that would create a loss to the lender, but you have that right under the terms of the loan. In your case, because the property is worth more than the amount owed on the loan, they will require the loan be paid in full and therefore there is no loss mitigation required.
  
  As an heir, you have several options at this point. You can keep the home, sell the home or walk away but since the home has equity, I certainly would not recommend that you walk away. If you want to keep the home, you will need to repay the existing lien with cash you have available to you or with a new loan. The reverse mortgage loan is to be now due and payable, and the lender will soon be looking for you to tell them how you intend to repay the loan (either by selling the house, with funds available to you or with a new loan in your name). Absent a viable plan to repay the loan, the lender would sooner or later begin a foreclosure action, so you do not want to wait too long to determine what you want to do.
  
  Your second choice is to sell the home. If you chose this option, you would sell the home and repay the loan with the sale proceeds. In this case, you would list the home for sale and provide the listing information to the lender and request that they give you time to sell the home. If the listed price was reasonable and you were diligent in your efforts to sell, you should have no problems with the lender. When the property sold and the sale closed, the closing agent would obtain a Beneficiary's Demand statement from the lender and repay the liens/loans on the property then forward remaining proceeds (minus your costs) to you at that time.
  
  If you decided that there really was no equity left in the home or that there was no loss, but there also was not sufficient equity above and beyond the amount owed to make it worth your while to sell the property (i.e. the property was worth $100,000 and the amount owed was $99,000), you could decide to walk away and let the lender take the property or could participate with the lender in a Deed in Lieu of Foreclosure to make the transaction occur faster.
  Either way, the lender cannot seek additional funds from your mom or her estate or from you at any time and there are no bad consequences to you at any time (it never affects your credit, etc.) if you choose to do so. If the amount owed is such that there is no loss but would not make a sale worth your time and payment of commissions and costs, etc., you can choose to remove all your mom's personal belongings and just let the lender take the home and be done with it.
  
  You should try to act as quickly as possible regardless of the direction you choose at this time. The clock is ticking and the last thing you want to do is wait until the lender starts a foreclosure and then you are forced to act in haste because the time in running out.
  Reply to Michael
Kim B.
July 11th, 2022

Hello ARLO,
I am a Realtor and have a home listed that has a large reverse mortgage on it from Novad. The house is not worth the loan amount. The attorney of the estate suggested we list it and try to get the loan company to accept a short sale price. I have 8 offers, but the reverse mortgage company is not answering my call. Any advice?
Reply to Kim
- Michael Branson
  July 13th, 2022
  
  Hello Kim,
  
  I do but you probably are not going to like it. For the borrower or the borrower's estate to sell a home on a short-sale, they need to have HUD's approval (and that is true of any sale in which you need the lender to accept an amount for less than is owed as payment in full for the debt). The servicer you mention, NOVAD, is notorious for poor communication but in this case, it might be justified.
  If you have no authorization from the borrower or heir, the servicer will not speak with you about the loan or the property. That could be why they do not respond to you. When you said the Attorney of the Real Estate, are you referring to someone who has legal authority to act on behalf of the estate and not the current heir/owner?
  If so, they should send their documentation to NOVAD to show that they have authorization to act on behalf of the borrower/estate (depending on whether the authorization was set up by the borrower(s) before passing or is court ordered) and then they need to request the opportunity to sell the property at an amount less than the full amount owed on the loan.
  
  NOVAD will conduct an appraisal if they have not already done so and will let the executor or administrator know what they are willing to do on a short sale basis.
  The part I mentioned about I don't think you will like it is that this process does not happen overnight so they will probably not be particularly swift in any of their correspondence but at least once the facts have been established that the attorney you referenced does have the legal right to act for the property on behalf of the estate, things should begin to progress.
  Reply to Michael
Andrew G.
February 16th, 2022

Hi Arlo,
I live in Florida. My dad is 95 years old and has an HECM with no equity left in the home. He is divorced although his wife's name was is on the original deed and title. My name is not included. The mortgage company will not add name to the loan.
My dad does have a living trust and an enhanced life estate special warranty deed. I am listed as the grantee and trustee/ beneficiary on both. I am 62 years old and my dad is still living. If he should pass away before me, we want to make sure that I can continue living in the home until I pass away.
What are the options if I don't have good credit?
Reply to Andrew
- Michael Branson
  February 16th, 2022
  
  Hello Andrew,
  
  When the last borrower on the original loan is no longer living in the property as their primary residence, the loan becomes due and payable. No other names can be added to the loan after the loan has closed and since his spouse is no longer living in the home, when your father passes or permanently leaves the home for any other reason (i.e., full time assisted care living), that loan becomes due and payable.
  I am not an attorney and cannot advise you on legal matters so you should contact an attorney to determine what the process would be for you to take title at that point because if your father's ex-wife is still on title, there may be issues with heirship, especially if she has children.
  I can't say, you would need an attorney to tell you what may or may not need to be completed in order for the title to pass to you (if there would be a probate required, etc.). At any rate, since the loan is due and payable, you would need to be able to replace that loan with another loan in your name and again, you would need to hold title to do that.
  
  You have stated that there is no equity left in the home at this time. As the heir of the borrower, you will be given the opportunity to repay the loan at the amount owed or 95% of the current market value, whichever is less. Knowing these options, you should be concentrating on shoring up your credit now while living in the home with dad and not paying a mortgage payment so that when the time comes you have the financial wherewithal and credit scores to be able to finance the new loan.
  You are old enough to get a reverse mortgage on your own but you would need to have sufficient funds to be able to bring the loan balance down to about 50% of the property value at 62 years of age if you wanted to have another reverse mortgage in your name to be able to continue to live in the home without having to make a monthly mortgage payment.
  Reply to Michael
Bobbie
February 15th, 2022

Hi Arlo,
My mom has probated my grandpa's estates and it's is still in the probate process but it's been a few years due to covid and the courts systems are backed up so she's still awaiting to clear his title but now PHH mortgage said they are going ahead to Auction his property in April if she can't come up with the money in March to pay the reverse mortgage. Can I pay with cash to stop the auction? So, her and her lawyer can finish clearing the title? We want to keep the property and are worried we're going to lose everything because PHH wants their money now and won't give my mom more time.
Reply to Bobbie
- Michael Branson
  February 16th, 2022
  
  Hello Bobbie,
  
  As the heir to the estate, your mom should be able to pay off the loan now. I would suggest that you have your attorney contact the lender and request a Beneficiary's Demand for payment in full.
  Reply to Michael
Randy M.
June 29th, 2021

My parents had a reverse mortgage on their home, and both have past January 2021 we do not want the home and have removed all personal items as per the banks request (loan holder) today I received a letter in the mail to appear in probate court? For what I have no ties to her estate and have told the lean holder as much why am I and my siblings being sent these letters? Do I have to attend? I am worried sick over this so any help would be greatly appreciated thank you!
Reply to Randy
- Michael Branson
  June 29th, 2021
  
  Hello Randy,
  If you do nothing, the lender will foreclose and take the property. That would resolve any issues with the home and the reverse mortgage because the reverse mortgage is a non-recourse loan which means the only security the lender has is the property.
  However, I could not begin to advise you regarding a probate court notice or its implications. That is a legal matter, and I would suggest that you contact an estate attorney to determine what must be done and what possible liability you may have (or if there is none and it is simply a formality) if you do not attend the probate summons.
  I do not have that information and am prohibited by licensing law from giving legal advice even if I thought I knew the right answer.
  Reply to Michael
Dee
April 13th, 2021

Hello ARLO,
My grandmother passed in December 2020 and she had a reverse mortgage. The amount to pay back is too much for us to get a loan. I received a 60 day notice to vacate, but during the pandemic it has been difficult to find a place to rent. Do I have any resources so i don't get an eviction on my credit if I can't find a place to move into within the 60 day period? Why am i not able to be out by the 6 month mark and not 60 days?
Reply to Dee
- Michael Branson
  April 13th, 2021
  
  Hello Dee,
  
  The loan became sue and payable in December when the borrower no longer lived in the property. It is coming up on 4 months now and will be 6 months by the end of the 60-day notice.
  I honestly do not know what the status of the foreclosure on the home is, but you can always check the progress and check with an attorney to determine what legal steps the lender must take to remove you from the home if you hold over the time, they have given you.
  I cannot tell you if you are in a state that allows you to remain for a longer period if you do not vacate within the notice period or if the Sheriff or other law enforcement can show up and physically remove you immediately or not.
  An attorney can give you that information though and there may also be something you can file at this time that would prolong the timeframe due to Covid, but I cannot advise you in this area.
  Another thing you may want to ask the attorney about though would be the credit issue. I don't see how that could possibly affect your credit because you are not being evicted by a landlord and the lender cannot report to a credit bureau any negative credit item about you.
  You did not sign any binding agreements with the lender and there is no failed credit agreement to report. I suppose if you did something that would create a legal item and a judgement is filed against you because of your actions for which a court finds you liable, that could be reflected on your credit.
  But I would ask the attorney if just being evicted from a family members home on which you were not on the legal title at the time the home went through foreclosure in any way affects your credit.
  Reply to Michael
Bill R.
February 18th, 2021

Hello ARLO,
I have had a Reverse Mortgage in Colorado for 10 years and am 72 and healthy. My home was recently appraised at $860,000 and the balance on my RM is $440,000. I have filed a beneficiary deed naming my two brothers as owners if I die.
If I die suddenly from an accident, I want to make sure my brothers have enough time to market and sell my home and obtain the difference between the selling price and the RM loan payoff, and to prevent the RM company from foreclosing and taking that amount for themselves.
What are the steps my brothers should take if I die suddenly?
Reply to Bill
- Michael Branson
  February 18th, 2021
  
  Hello Bill,
  
  Your brothers should have ample time to sell the home but there are a few things you can do now to be sure they have all the information they need to move quickly. Firstly, write a letter to your lender or servicer now authorizing them to speak to your brothers on your behalf on all matters relating to your loan.
  Many times, things get bogged down while a lender is trying to ascertain that an heir does have the right to work with the lender on behalf of the borrower. If you do that now, there will be no delay in the communication since they will already have received permission to speak with your brothers about the loan.
  
  Next, make sure that your brothers know that they are under time constraints. When they contact the lender, they can let the lender know that they will sell the home and tell them their plans and the lender will even give them time to do it - if they believe that the heirs are moving toward a sale of the property.
  The way it typically works is that lenders give heirs 3 month's with extensions as needed to sell the home and pay the loan off. The HUD policy states that lenders can do so up to a year I believe without obtaining HUD approval as long as they see that the heirs are working on the sale.
  That might mean they get copies of the listing and are satisfied that the listing price is reasonable for the neighborhood and the property. Then as long as the sale proceeds, they are fine with waiting for the payoff.
  However, the asking price is unreasonable, the property is not listed, or it appears that the heirs are not actively marketing the home, sooner or later the lender will initiate foreclosure proceedings because it will take anywhere from 5 - 6 months from the time a foreclosure begins until the end.
  If a lender waits for 12 months with no sales attempts then begins foreclosure, they can be 18 months or more out before a foreclosure can be accomplished and with some homes that can just result in a much larger loss. In your case, there is plenty of equity in the home and no reason your brothers cannot sell the property in 12 months or less.
  Reply to Michael
  - Eileen H.
    January 24th, 2022
    
    What information do I need to include to HUD/Novad (loan servicer) to authorize my daughter to speak with them regarding my reverse mortgage. I have no assets, except $100,000 equity in my home. What is the best way to have my daughter become the legal owner of my home once I pass away so it can be sold and resolve my RM loan?
    Reply to Eileen
    - Michael Branson
      January 29th, 2022
      
      Hello Eileen,
      The loan allows you to add anyone to title at any time as long as you also remain on title and still live in the home so you can add your daughter to title with you as a joint tenant which means she will own the home when you pass. I recommend you consult with an attorney to be sure you verify all state heirship laws and the title change is done so that there is no effect on your taxes.
      The loan still becomes due and payable at that time so you need to take other steps now as well. You need to write a letter to NOVAD now authorizing your daughter to speak to them and them to your daughter on all matters relating to the loan now and after you pass.
      The attorney may also suggest a power of attorney that you send a copy to the lender in case you become incapacitated prior to passing. Your daughter needs to realize that once you permanently leave the property, the loan becomes due and payable.
      That means she has to be ready to sell, refinance or payoff the loan with other funds available to her or they will begin foreclosure proceedings. If she knows what she plans to do before the lender contacts her and she is already on title, she will be way ahead of the game.
      Remember, if you leave the home temporarily for medical purposes, you have up to one year to return. If this happens, tell her to use this time wisely to get ready. If the ultimate decision is to sell anyway, the sooner the better as an empty home just accrues interest on the loan and leaves less money for your care or your heirs after you pass.
      Reply to Michael
Robin R.
February 9th, 2021

I am one of 3 sibling heroes to my mom's home which has a reverse mortgage of $110,000. Two siblings would like to purchase the home and I do not. How would they go about purchasing the home and buying out my portion? The home is valued at $175,000.
Reply to Robin
- Michael Branson
  February 9th, 2021
  
  Hello Robin,
  
  Your mom's estate or the heirs (depending on if title has changed from mom to the heirs yet) owns the home. You should check with an estate attorney to determine if the property will need to go through probation and see what provisions mom made for transfer of ownership upon her passing (did she have a trust, a will, etc.).
  Once the property is fully in the name of the heirs (you and your siblings) the reverse mortgage will need to be repaid as it is now due and payable. This means that the 3 of you will need to discuss and determine the terms of the sale of the property interests.
  Using just your numbers (and I am sure there will be costs and this will need to be updated but this is good for now), there is approximately $65,000 equity in the home.
  If you were all to sell the home, you would have selling costs of approximately $8,750 - $14,000 (unless you did a for sale by owner) so you might want to think about using something like $60,000 as the number to split 3 ways for the equity position to account for costs.
  In that way, your siblings get a little break for their financing and you don't have to pay a portion of any sales costs but that's just a suggestion - not advice. You all need to do what is right for the 3 of you.
  
  One third of $60,000 is $20,000 and that would be what they would need to pay you to buy out your interest in the home. This could be done at the time they refinanced the home, with cash they had available to them, with a loan from you to them or literally any way the three of you agreed upon.
  The only way you will know for sure what the actual 1/3rd distributions of the equity total are to see what the appraisal from the lender comes in at on the home and the total costs to pay off the existing loan.
  And I know you are all family but if there is any possibility of disagreement of amounts or terms, you may wish to have an attorney or other third-party act as an arbitrator in the transaction so that it does not become a wedge between you and your siblings.
  If they are using a loan, they can use the same title/escrow to pay you and record all the necessary Deeds for transfer of ownership to the two of them.
  Reply to Michael
Kathryn N.
August 14th, 2020

My husband inherited his parents' home when they died and have a reverse mortgage. We in here to get through a trust and the trust the problem is we offered the phone company that has to know to make payments they refused they wanted a full payment or we don't have that kind of money. I am waiting for the trust to go through probate so that leaves you hanging, and they are already trying to foreclose. I do not know what we can do, we do not want to lose the home as it has been in the family for 40 years. Where do we go from here what are rights do we have?
Reply to Kathryn
- Michael Branson
  August 14th, 2020
  
  Hello Kathryn,
  
  The loan is now due and payable since there are no original borrowers still living in the property. There are agreed upon rights for the borrower and their heirs in the loan documents.
  You have the right to pay the loan off and keep the home, sell the home, or let the lender take the property back and owe nothing. The reverse mortgage does not grant the right to heirs to make payments on the existing loan though.
  You do have options, but the time is not unlimited to act. You can sell the property and pay off the loan that way. You can choose to keep the home, but then you would need to refinance the loan with a new loan in yours and your husband's name if you do not have the cash available to repay the loan with your own cash.
  You cannot assume the existing reverse mortgage or just make payments on it, there are no payments on that loan, and it is not assumable. If you wish to keep the home and stay there, it sounds like you need to decide for a new loan as quickly as possible.
  
  If you are not sure how to handle the trust and any possible probate issues, I would suggest that you contact an estate attorney immediately. Perhaps you could use the same attorney your in-laws used to create the trust if you do not have an attorney of your own.
  The lender just wants to know that you are working toward the repayment of the loan and may be willing to give you a little extra time once you can show them that you have a loan started and the title is in the process of changing.
  Also, as soon as you are working on the title issues, you can simultaneously be working with a lender to place your new financing. If you do not believe your income or credit will make you eligible for financing at this time, you need to see if there are any other options within the family for the financing or consider placing the home on the market for sale.
  The last thing you want to do is wait until the home goes through foreclosure because at that time all your options are gone.
  Reply to Michael
Adriana G.
July 3rd, 2020

First, let me thank you for including the
"Ask Arlo" section. It made understanding the concepts explained much easier. I too am in a touchy situation so your explanations were very helpful. I particularly like that you stress the importance of having a clear title. Your articles were much more than helpful.
Reply to Adriana
- Michael Branson
  July 7th, 2020
  
  Hello Adriana,
  
  Glad to help!
  Reply to Michael
Lorene W.
June 29th, 2020

As a family, can we buy a life insurance policy to pay off a reverse mortgage?
Reply to Lorene
- Michael Branson
  June 29th, 2020
  
  Hello Lorene,
  
  I cannot advise you on the rules about insurance purchases and since you left out a word in your question I can only assume you are asking if you can purchase the policy on another individual (i.e. mom or dad?).
  That would be a question for an insurance agent as I do not know the laws regarding who can and cannot buy insurance on other individuals.
  However, I can tell you that I have had a borrower in the past who told me that he had worked out a plan with his insurance agent for exactly that type of situation.
  Keep in mind though that this was the borrower buying the insurance and not a third party though. I would refer you to your insurance agent and it might also take the participation of the insured, but it is best to research while everyone is healthy!
  Reply to Michael
Valerie S.
May 18th, 2020

My uncle died and left me his home, but it was under reverse mortgage and he owes them an x amount of $ to pay what he owes. It is now in collection; would I be able to purchase the house or finance it through a bank or lending institution. If so, what are some of the places I could go to. Also is it possible to purchase it at the appraised value now? Versus the amount my uncle owes them. Also, can we finance through the HECM directly? Also how long do we have under reverse mortgage to decide what to do about the house after the death of its owner?
Reply to Valerie
- Michael Branson
  May 18th, 2020
  
  Hello Valerie,
  
  The first thing you need to do is be sure you have the title cleared in your name. Once you have this completed, let the lender know that you wish to exercise your option to pay off the loan at the lesser of the amount owed or the current balance.
  The lender will obtain an appraisal and will send you a demand for the balance based on that value or the amount owed. You can finance that through any lender, you just need to check with the lender's you have locally based on your qualifications -you could use HUD-insured financing but HUD is not a lender, so you need to work with a lender. If you are serious about getting your financing, the reverse mortgage lender will work with you to give you time to complete your financing, but the clock is ticking so do not delay.
  Reply to Michael
Debbi
May 17th, 2020

A good friend just died with a reverse mortgage and I understand all the info as far as the heir being the one to handle the situation. However, he's not, in the least, able to take on the loan repayment, sell the home, or even make the decision on which way to go because he doesn't have a clue that there is even a reverse mortgage to begin with. I took care of my friend all the way up to her last day on earth. Even though we discussed leaving a will, we ran out of time. She wanted to leave it to me. She knew her son would not be able to pay off the balance. She left 5 cats in the home also. I have been taking care of them till homes are found.
My question is, if her son just walks away from this, is there a way I can get a hold of the lender and work on a deal to where I could take the house, paying the balance on it. Or would I have to go with the asking price? In other words, do close friends count as far as being able to get in on the payment due plan or are we just out of luck on holding on to something special between friends?
Reply to Debbi
- Michael Branson
  May 18th, 2020
  
  Hello Debbi,
  The only thing the lender can do is follow the law. If the son is not willing to do anything at all, you could approach the probate court and if you have anything that would allow them to grant ownership to you then the lender would follow the legal change of ownership.
  Otherwise, if the son does not do anything to sell the home or repay the loan, the lender would foreclose and sell the home on the market. Perhaps you could work out some arrangement with the son if you do not believe you have any documents or anything that would hold up in court?
  Reply to Michael
Julie C.
March 9th, 2020

My mom has a reverse mortgage. My sister, brother-in-law and two kids moved in with my mom. My sister recently died from cancer. Brother-in-law and kids are staying in the house with my mom. They have brought a huge number of belongings that I know they will not take when my mom dies, and they must move out. I do NOT want anything to do with selling the house, but my mom says she has willed everything to me (only child now). If I don't do anything with the house (leave it full of everybody's belongings), will I be held responsible legally or financially? I don't want any money from the house - I just don't want to empty it, clean it, or sell it. I want to make sure I won't owe any money or that my credit rating will not be hurt? Thank you so much!
Reply to Julie
- Michael Branson
  March 9th, 2020
  
  Hi Julie,
  
  Let me start out by saying that you are not liable for the loan and you do not have to worry about it. But let me offer a little bit of advice if I may.
  Before you automatically wash your hands of the whole thing, I would advise you to contact a senior specialist real estate professional and determine the value of the home.
  Compare that to the most recent statement your mom has from the reverse mortgage (she should be keeping them someplace where you can easily get to them in the event she passes).
  If there is equity in the home, that is the real estate agent is convinced that the sale price is sufficiently higher than the amount owed, I would recommend that you let them market the home for you.
  
  Most senior specialist agents know companies that will come in and organize all the things left behind by your mom and your sister that you don't want and will conduct an estate sale.
  Part of the deal with these people is that everything that doesn't sell, they donate or throw away and they leave the home completely empty when they are done -you don't have to clean it out.
  The estate sale companies will make sure that between mom's stuff and your sister's they believe there is enough merchandise to sell to split the proceeds with you before they even start.
  Then the real estate agent can sell the home and your mom's estate (you) would receive any money from the sale of the property and you don't have to clean it out or sell the home. It is certainly worth the little time you must look on the internet for a senior real estate specialist and the money may come in handy with any other expenses.
  
  In the meantime, have mom write an authorization to her lender to allow you to speak to them and them to you on all matters relating to the loan. This way, when the time comes, you will be able to communicate with them on the loan whereas they cannot talk to any third parties without a court order or authorization from the borrower.
  The house will probably need to go through probate if it is not in a trust (and may need to anyway) but if you are named the successor trustee and beneficiary, you would be able to start all the steps discussed above to sell the home with very little participation on your part.
  
  And you can always let the lender take the house through a foreclosure action. Your mom signed the loan documents, you did not. Therefore, there could never be any legal action against you or any negative reporting to your credit as a result of the reverse mortgage.
  The lender has only the home for security on the loan and if you make no attempts to sell the home or repay the obligation, they will foreclose on the debt. Any items left in the home after the foreclosure would be thrown away.
  You should seek professional advice from an accountant or attorney if you are concerned about any possible legal or tax ramifications there might be to mom's estate.
  Reply to Michael
Wendy N.
November 4th, 2019

My mother past 2 years ago and an atty sent me certified mail for me to pay this loan 2 years after her death they identified me and made contact with me 2 plus years later I'm my mother's only child I had legal stake in this property they should have given me a series of options- no- I would of liked to move into my mom's house and acquire the mortgage balance I live on the west coast and my mom in Jersey I couldn't make the funeral due to my vehicle broke down and my children divided everything among themselves leaving me not even a photo the house then was broken into and ransacked with her furniture my memories etc. There were still assets in the home the house is in foreclosure now what are my rights now being it was mandatory for them to identify and make contact with me soon after she died and did not now I have an atty rudely demanding payment in full they did not follow the law I was unaware of my legal right to the home and having options to move in to the home and repay it I feel I've been wronged by them do I have a case please help!
Reply to Wendy
- Michael Branson
  November 4th, 2019
  
  Hello Wendy,
  
  I am afraid I cannot tell you what "legal rights" you have under New Jersey laws. I can answer any questions you have about the reverse mortgage and your rights as the heir regarding the loan, but I cannot give you legal advice. I am surprised though that you have waited for 2 years and until the lender contacted you to inquire about the property if you are the rightful and only heir?
  The lender often has no idea who the heir with claim to the title will be. Lenders cannot make the determination as to whom they will work when the owner of a property passes and usually must wait until the new owner contacts them with the legal paperwork to solidify their claim to title. This may be from a probate action, a trust certification or other means, but the lender is not the one to determine the heirship to the home.
  That is up to the heirs to establish and to communicate to the lienholder (the lender). In all honesty, if you have never taken any steps to notify the lender of your ownership of the home or taken the steps to transfer the title, I am surprised you were contacted at all and the property didn't just go through foreclosure without you ever being notified. That may be an additional requirement in New Jersey, I cannot say.
  
  My suggestion to you at this time would be to contact an attorney who specializes in foreclosures in New Jersey to determine what rights you have at this time. You will probably need to have the foreclosure delayed in order to have enough time to complete a change of title and he/she will know if this is possible and if so, what steps would have to be taken to complete the stay of foreclosure. You also need to know that the loan is due and payable currently.
  Even if you can get the foreclosure delayed, you need to be able to pay the loan off right away or it will continue again very soon. You can do this with money available to you or with another loan. If you do not have the funds available to pay off the loan and do not believe you can qualify for another loan to refinance the existing loan, getting a delay in the foreclosure would not be of any benefit unless you believe the home is worth more than the amount owed and you can sell it quickly enough to make the delay profitable on a sale.
  
  I suggest that you not delay. It sounds like your children have already been through the home and taken anything of value (and what they didn't take, thieves may have) but if the home does go through a foreclosure action, the home will be emptied and the contents disposed of pursuant to New Jersey laws so you would have no chance to retain anything of your mom's.
  These are all things you can discuss with your attorney since he/she will need to know what your intentions are so that he/she can adequately advise you on all matters.
  Reply to Michael
Bryan M.
September 18th, 2019

My stepmother told my dad they didn't have enough money to make payments and that they would have to mover or do a RM. My dad signed the RM and died 8 days later. My stepmother became the Life Estate Tenant and I became the remainder-man over half the property. My stepmother continued to borrow money over the next 10 years without my knowledge or consent. Now her children are saying that I am responsible to pay half of the RM. This substantially reduces the inheritance my father left to me. How is it that I can be held liable for loans made after my dad's death? Shouldn't her estate be responsible for the RM? Didn't my dad's liability to the RM end with his death?
Reply to Bryan
- Michael Branson
  September 18th, 2019
  
  Hello Bryan,
  
  Unfortunately, this is a question for an attorney and not a reverse mortgage company. I can answer questions for you about the loan, but I cannot answer heirship questions or legal questions.
  I don't know what legal steps your father and stepmother took nor what provisions were made or the laws of the state in which the property is located that would pertain to her rights as the co-borrower/spouse or yours as your father's heir. It may also come down to ownership of the property before marriage, I do not know.
  You really should speak to a qualified estate attorney to determine your rights in this situation.
  Reply to Michael
Benancio Alvarez
September 9th, 2019

My brother died and had a RM on his property. The house went under foreclosure and was sold. Now I am getting lots of calls from different agencies offering to collect an excess money that came out of the sale of the house. Can we recuperate the money by ourselves without using any of the agencies calling? How do we do that?
Reply to Benancio
- Michael Branson
  September 15th, 2019
  
  Hello Benancio,
  
  From your description, I am assuming that your brother's home was purchased by someone who bid against the lender at the foreclosure auction and became the highest bidder at the auction. Is that correct?
  I make this assumption because the lender or lienholder only bids what is owed to them and that is the opening bid. If no one bids higher, the lender or lienholder in a Trustee's Sale then wins the auction and becomes the owner of the property.
  However, if someone or others bid higher than the lienholder, the lender or lienholder will not increase their bid and the new owner will be the party who is the highest bidder and the lienholder will be paid in full of the proceeds of the sale. Any amount paid above and beyond what is owed to the lienholder belongs to the owner of the property.
  Since your brother has passed, if he had no other heirs, you may be entitled to the remaining funds. I am sorry, I do not know the exact process for others to reclaim any remaining funds. My only advice would be to contact an attorney who handles such matters but the ones contacting you may also be attorneys specializing in just this sort of matter.
  Also, are they offering their services to you at a percentage of the amount recovered or at a flat fee? The reason I ask is because unless there are multiple bidders to drive the price up, the sale would stop with the first bidder who bid higher than the lender who had foreclosed and there may not be much money available. If you do not want to check with an attorney, perhaps a title company can help you?
  They may be able to check public records anyway and see what the amount of the foreclosure was that was filed and then also the tax stamps to see what the file sale price was to see what kind of money you are talking about anyway and they may be able to tell you how to contact the state to claim the funds.
  Reply to Michael
deb papadopoulos
July 11th, 2019

RE: Reverse Mortgage & Probate
Which part of the home, the assessed value or the balance due to reverse mortgage company is considered an asset, if any? Is payment due considered a debt?
Reply to deb
- Michael Branson
  July 12th, 2019
  
  Good Morning,
  
  I don't know if I fully understand where you are headed with this but let me see if I can explain, in on-accounting terms because we are not accountants, how lenders look at borrowers' assets and obligations. Your home is your asset. The value of the home, not the assessed value but the market value, is the value of the asset. Your assessed value may be much lower than the actual value especially if you are in an area that limits tax increases and the home could sell for much more than the tax assessed value. In some instances when property values were declining, assessed values were above market values but we have not seen that much for several years now.
  
  The balance owed on any liens or loans are considered obligations or debts. Lenders are not usually concerned with the Net Value of the borrower which is something an accountant might be more interested in when determining an individual's net worth. Since the reverse mortgage requires all other liens and loans to be paid off at the time the loan is closed, there will be no other loans on the property and the reverse mortgage calculator will determine the amount of the loan available. Therefore, the maximum amount the borrower can borrow as a percentage of the home's value is determined by the calculator and it takes into consideration other factors such as borrower ages, interest rates and HUD lending limits as well.
  
  The other type of "debt" lenders does review is something that reverse mortgage lenders refer to as monthly obligations. They look at what you are required to pay for any loan payments, credit cards, court ordered payments, etc. and to that they add your property charges. The property charges are the taxes, insurance, any HOA fees if applicable and any other assessments you are required to pay on the house. HUD also currently uses a .14¢ per square foot cost for total utilities (they may switch to actual utility cost at some point but have not as of this time). After all the charges are added, the total is subtracted from your income and you must meet their residual income guidelines. The residual income required changes based on location and family size. Borrowers should note, there are other ways to offset debts or dissipate assets in order to qualify so borrowers should not be afraid to check with a lender about their circumstances if they feel they may not meet the minimum residual income.
  Reply to Michael
Randolph R.
June 5th, 2019

My mom has a reverse mortgage. When she passes, do I as an heir, sell the property, pay off the loan, and keep the remaining monies, or does the lender sell the property and give me what's left over?
Reply to Randolph
- Michael Branson
  June 5th, 2019
  
  Hello Randolph,
  
  Your mom decides who does what with the property in her will or trust and you all proceed accordingly. The lender has a loan on the property, they don't own it.
  Therefore, hopefully mom has directions by way of a will or trust that will determine which heir will act as her executor and what the disposition of the property will be. The loan will be due and payable at that time so whatever the heirs decide to do with the property (keep it or sell it), they will have to keep in mind that the loan will be due and plan accordingly.
  
  This means that if you are the one tasked with the final disposition of the property, you could choose to sell the home or keep it. If you sell the home, all equity in the property belongs to the estate and you should probably speak to an estate attorney to determine the best way to divide the proceeds.
  I may be incorrectly presuming that there are other heirs, I just saw that you used the term "an heir" and not "the heir" so if I am wrong, even if you are the sole heir, I don't think it's a bad idea to discuss options with a professional. Either way though, you will need to pass the title from mom to you so that you can sell it and that could also include a probate.
  
  If mom is fully competent now and the property is not in a trust, you may want to visit with an estate attorney now to determine if this is a good way for you to proceed, before mom can no longer sign legal documents.
  I cannot give you legal advice, but I can advise you to seek out the assistance of a good estate attorney who can before the time comes because I know from first-hand experience and from speaking to many families that it is much easier to do things while mom is still alive and able to communicate her wishes than waiting until later when people are grieving and then it takes legal proceedings to accomplish title changes, etc. and you are then working against a ticking clock as that loan is due.
  Knowing the plans also takes out any possible family disagreements, especially caused when parents pass without leaving written instructions and no clear path to achieve the plan.
  Reply to Michael
Denise V.
May 29th, 2019

My mother and father took out a RM several years ago. My mother passed 3 yrs. ago and my dad just passed away in May. I am an only child and I'm not sure all the documents that I will need to send other than death certificates and intent to buy from the bank my son is going to use to buy the house. As far as I know I'm only listed as a contact person on this loan. Can you advise on what other documentation I will need?
Reply to Denise
- Michael Branson
  May 29th, 2019
  
  Hello Denise,
  
  You need to get your title in order. I would suggest that the first thing you do is contact an estate attorney to determine what steps you must take to become the lawful owner of the property. I don't know if you are the heir by will, if the property was in a trust or what the probate requirements will be in your area, but an attorney can guide you through all of that. Once the property title has passed from the estate to you, you can then do whatever you want with it.
  
  Your son does not "buy" the property from the bank and the bank cannot sell it to him at this point. Mom and dad or the estate, anyway, still own it and the bank only has a loan against the property for collateral. The title needs to pass to you as the heirs based on what mom and dad directed or through a court order if you are the only heirs and your parents' wishes were not written in advance.
  If there are other possible heirs, this may take a while. Once you own the property, you can take the steps needed to secure a new loan to pay off the reverse mortgage, whether than is in your name, your son's name, both your names or whatever (unless of course you have the funds available without having to use a loan). Any steps needed for a new loan will depend on who is going to live there, what the new lender requires, etc. but will have nothing to do with the reverse mortgage.
  
  The reverse mortgage lender cannot even work with you on the loan yet as you are not a party to the transaction, and they do not have legal authority to do so unless your parents already gave them written authorization which is doubtful. You may have been listed as an alternate contact, but all that did was allow the lender to contact you if they could not reach the borrowers.
  It does not allow the lender to negotiate the payoff of the loan with this contact individual because they have no way of knowing if you are also the heir and they will not get into the middle of any possible disputes. That would be for the court system to decide. That's why it is so important for you to clear the title as soon as possible. If mom and dad had a trust or will, that will probably be much quicker but again, you need an attorney to help you get through that as quickly as possible.
  
  The steps you will take once the title is clear would be to determine how you are going to pay off the loan. It sounds like you have already decided not to sell the property, so you need to know the property value at this time. As the heir, you can pay off the loan for the lower of the amount owed, or 95% of the current market value. Look at the most recent statements your dad had from the lender and compare the outstanding balance to the property values in the area.
  That will give you an idea of what you will have to repay. Then you will know what kind of loan your son or you and your son will have to get in order to repay the existing reverse mortgage if you must apply for financing. I do not know what lenders would say about actually applying for a loan before you have clear title, but it would not hurt to talk to some, let them know what you are doing and at least get an idea of the qualifications needed.
  That way you can have everything ready to go for the time that the title is transferred to your name because at that time, you can move forward with the new loan to repay the reverse mortgage and if you wait until then just to get started, you will have wasted time that you may need to close the new loan.
  Reply to Michael
Shannon G.
May 23rd, 2019

Hello. I have a question about my mother's reverse mortgage. My mother had a reverse mortgage done on her home about 20 years ago. She has since died., June 3, 2018. Myself and my family have been living at the home. We sold the house 2 months ago and have yet to have a closing. What will happen if the closing doesn't happen until after the 3rd of June 2019. We only have until then to move and turn it over to the reverse mortgage company. Please help, we have a daughter that has cerebral palsy and a son with whom has autism. We real need the small amount that will come with the sale to get a suitable place to move to.
Reply to Shannon
- Michael Branson
  May 23rd, 2019
  
  Hello Shannon,
  
  It's very difficult for me to advise you based on the limited information you have supplied. The reverse mortgage company can only deal with verified heirs though so I can only ask what steps you took to sell the home? Was there a will? Was the property in a trust? Did it have to go through probate?
  Like the lenders for all loans, the reverse mortgage company cannot supply information to any third party without the proper authorization and if your mom did not provide that authorization to the company while she was still living, then you must be sure to follow the proper legal steps to sell the home. The reverse mortgage lender will not make the determination as to who can and cannot act on behalf of the estate, there are legal steps for this, and you must follow those steps.
  
  I do not know what you have done or what your state requires, but I would suggest you contact an attorney if you have not already done so and you have not taken the legal steps to clear the title. The problem you may have is that the title company and the lender cannot act to allow the closing without the legal cover to know you have the right to sell the property in the first place.
  That may take a court action to complete. Without knowing if there are other heirs that could have a claim, if there are other creditors, etc., the lender and the settlement provider will not proceed with a closing. An estate attorney in your area will know exactly what you need to do to proceed with the transaction.
  Reply to Michael
Jason
May 11th, 2019

I moved in with and care for my 102 year old grandmother after her live-in daughter passed away. There is currently a reverse mortgage (line of credit) on her home. My intention is to pay off the loan and purchase the house, but I dont want to wait until she passes to get this done. I've heard some reverse mortgage lenders start selling the home immediately upon notification of the borrowers death. Can my grandmother sell the house to me now so I can get a VA home loan to cover the balance due on the reverse mortgage? The payoff is about $38K, but the house is appraised at about $112K. Thanks for any information.
Reply to Jason
- Michael Branson
  May 14th, 2019
  
  Hello Jason,
  Your Grandmother owns the home and can sell to whomever she pleases. If she wants to sell the home to you now, she can certainly do so and there is no prepayment penalty ever on a reverse mortgage.
  Reply to Michael
Jami
April 24th, 2019

I am selling a property that has a reverse mortgage on it and the owner passed almost a year ago next month. However, when I asked my seller if they had informed the note holder of the owners passing he said that he did not want to disclose that information. He is the executor of the trust. I have had several offers on the property and he has declined them all. Now he is talking about remodeling the home which can be several more months. Should I be concerned about anything?
Reply to Jami
- Michael Branson
  April 24th, 2019
  
  Hello Jami,
  The seller is playing a dangerous game. He's hiding the fact that the owner has passed and may be falsifying occupancy certifications to the lender (they go out annually and it's hard to say for sure, but chances are that one has gone out since the owner passed unless the timing was such that it went out just before the owner passed and it hasn't been a year yet).
  If he has not been truthful and the lender discovers this, they will be much less likely to delay before initiating foreclosure proceedings. Furthermore, if he collected additional draws on the loan after the borrower passed by supplying the lender false information, the lender could choose to act on that.
  If the heir simply has not said anything and has not sent any untrue information to the lender, chances are if the lender discovers the passing of the borrower they will just call the loan and the heir might just have a little more incentive to close the sale with no real consequences. But he is accruing interest on the loan this entire time even if he hasn't done anything to take additional funds. Have you seen a monthly statement? You may want to be sure there is enough equity in the home.
  Reply to Michael
Kim
April 16th, 2019

My friends father passed away over a year ago. She keeps trying to get in touch with Novad and they will not return her calls. She had an attorney and he had no luck either. She has thought about renting the house to keep squatters away. What risks are there? She is keeping the power on and the taxes paid.
Reply to Kim
- Michael Branson
  April 18th, 2019
  
  Hello Kim,
  The loan is already due and payable. Has your friend done anything to make sure the title to the home is in her name? If so, then she needs to do whatever she can to pay the loan off before they start a foreclosure action. Her attorney can work with a title company to request a Beneficiary's Demand for Payoff but if your friend does not have sufficient funds at her disposal now and cannot get a new loan because she is not on title to the property, then she would not be able to repay the debt and ultimately that is what she will need to do in order to keep the home -rented or not. But make no mistakes, the lender will begin foreclosure soon and if it looks like the heirs are not doing anything to repay the obligation (are not listing the home for sale or in the midst of a refinance) and have rented the home instead, I believe that would hasten their actions.
  Reply to Michael
Anne Parker
March 11th, 2019

My Mom had a Reverse Mortgage serviced by Novad. She passed away 2 months ago (12-28-2018). We notified Novad and they received our package on January 31, 2019, with all requested documents and the written statement that we wanted to do a Deed-in-Lieu transaction. Since then I have tried twice a week to talk to anyone who can tell me what is going on with the process, but, though I'm always told a Loan Specialist will call me within 48 hours, I have NEVER received a call back. The house is empty, vacant and ready to transfer but I am very concerned about vandals and the liability posed by the pool and spa in the backyard while Novad refuses to speak to me or move the process forward in a timely and safe fashion. Several of your articles mention the Deed-in-Lieu process as an easy and practical way for heirs to satisfy the Reverse Mortgage when there is no equity in the home. What is the usual timeframe to complete this transaction? Would Novad hurry up if I retain an attorney? The house is in a Trust and I am the Trustee (they have all this documentation). I worry that they will drain the Estate of funds if they drag this on, or worse, the house could be compromised by being vacant. My Mom was not a wealthy woman which is why she had the Reverse Mortgage to begin with! Homeowners Insurance on a vacant property with a pool is very expensive, as well as all the other maintenance services, taxes and utilities required each month. How long does this quite simple transaction usually take?
Reply to Anne
- Michael Branson
  March 11th, 2019
  
  Hello Anne,
  
  I am not sure which articles you are referencing, but I don't think we have ever stated or implied that the process would happen extremely quickly. There are several things that the lender must do before they can accept your property by way of a Deed in Lieu of foreclosure. I don't know when you first contacted them, but if mom passed away 2 months ago, they typically don't talk to the family for 30 days or more after that so I can't see this having been a terribly long time at this point.
  
  The lender must contact an appraiser and have an appraisal conducted on the property. I know you have indicated that you are willing to sign the Deed in Lieu, but they must know the value as well as make sure the that home is at a minimum "broom clean" with no more personal belongings in the home. They must also have a title company perform the title work to be sure there are no other liens on the property.
  If the lender accepts a home that is full of a borrower's personal property or has other liens on the home, they incur liability with those issues. If they must go through a full foreclosure, they are protected by law under the foreclosure laws and can complete the foreclosure, have any personal effects removed and it would be up to any other lienholders to either protect their interest or subordinate liens would be removed with the foreclosure.
  The lender/servicer does not even know if they have any of these issues usually in the first 30 -60 days and it takes a while to get the title, appraisal and all other items required together. When you compare a Deed in Lieu of Foreclosure time frame to a foreclosure though, the lender must do the same appraisals, title searches, etc. but does not have the additional 150 -180 days that a foreclosure would take so the timeframe is usually much quicker.
  
  I can't tell you exactly how long it will take because the timing is different in different areas and depending on different circumstances. If the property is completely empty and if it is broom clean with no other liens, the lender can still only move as quickly as the service providers for appraisal, title and other services need for their end of the transaction.
  If everything comes together without delay, it should not be a protracted process. If things pop up on title or if there are no appraisers available, etc, the timeframes will be delayed and that delay will depend on when everything can be obtained, if at all. In some cases, a Deed in Lieu of Foreclosure can never be accepted because of secondary liens that have been placed on the home subsequent to the reverse mortgage.
  
  About the servicer not getting back to you, that I cannot understand. Novad is HUD's servicer. Once you supplied the necessary documents to them to show that you have full authority to speak on behalf of the borrower, they certainly should be working with you as if you were the borrower yourself.
  Have they asked for any additional information or indicated in any way that the documents you sent to them are insufficient? I don't know if Novad would be any quicker if you retain an attorney, but an attorney may be better at determining their needs and supplying them with missing information, but that is entirely up to you. If Novad has everything, there should not be any delays above and beyond the time needed to get everything they need to accept the Deed in Lieu. I wish I could be of more assistance with why they are not communicating but I really have no idea at this point what is preventing that communication.
  Reply to Michael
Jennifer Jenkins
March 3rd, 2019

Great information, my parents had a reverse mortgage, started at $216.240.00
at least 15 years ago, loan balance now is 368.928.61...my father passed away 2 years ago, my mother is being taken care of by my brother 24/7, she is 94.. doing fairly well....we are not on the loan, so is our only option to get a new loan?
Reply to Jennifer
- Michael Branson
  March 4th, 2019
  
  If you are referring to when she passes and you want to keep the home, the answer would be yes if you don't have the cash to pay the loan off outright.
  If she lives in the home there is no payment due but once she no longer lives there, the loan will become due and payable. If you plan to keep the home, if you all have the resources to pitch in an pay the loan off, you can do it that way or it would take a new loan to repay the debt.
  Let me commend you. You are very wise to be looking at it now even if mom is doing well. Too often heirs wait until after their parents, etc. have passed and then time is short if financing is not readily available for one reason or another. Things can get messy if there is any dissention in the family as to what the final plans will be (which we see often when there is one family member already living in the home). It pays to have a plan with agreement by all parties.
  Reply to Michael
Jeannettea K.
November 12th, 2018

My mother passed two months ago. I was added to speak when she was alive. I was her caregiver and on SSDI in which she required care 24 hours a day. Before signing for the Reverse Mortgage she specifically asked what happens to me and because I am 65 they said it would pass on to me. But I received a letter asking my intentions. What really happens next? After her death I paid out of pocket over $1200 to catch up her taxes and currently this is home for me.
Reply to Jeannettea
- Michael Branson
  November 12th, 2018
  
  Hello Jeannettea,
  
  The loan never just passes on to someone else after the borrower permanently leaves the property, whether because of death or because they move to an assisted living facility. When you were added as a person eligible to speak on behalf of your mom about the loan, that just means that you have authorization the lender needs to discuss the loan with someone other than the borrower.
  Because of financial privacy laws, reverse mortgage lenders cannot divulge personal information or discuss a loan with a third party, even a son or daughter, without consent of the borrower or a court order. You have that consent but that does not help you about the loan now.
  
  The loan is now due and payable with mom no longer living in the property. Under the terms of the reverse mortgage, as the heir. You can sell the home, refinance the loan with a new loan in your name or pay off the loan with other funds available to you. If the amount owed on the reverse mortgage is more than the current value of the home, you can pay off the balance for 95% of the current value instead of the full amount owed. If you do not wish to refinance or sell the home, you also have the right to walk away from the property and owe nothing, regardless of how much is owed and what the value is.
  
  My suggestion is to first decide what you want to do and what you can do. If you want to keep the home but don't feel as though you could get a new loan to refinance the balance of the reverse mortgage, you need to find out how much equity is in the home (if any) and take steps to protect that equity. Contact a real estate professional in your area and determine the most probable selling price of the property.
  Compare that to your mom's most recent statement to determine whether there is equity in the home. You need to make sure the property title is in your name if you intend to sell it. If you are not on title, you cannot sell the home or get a new loan on it so as soon as you determine that there is enough equity to get a new loan or to sell, you need to work quickly to obtain title to the property.
  If you are getting a new loan, then you would show the lender that you have taken those steps and they should be willing to work with you to complete your financing. If you are selling the home, again, once they see that you have taken the steps to clear the title and have listed the home for sale, they will work with you to allow you to complete the sale and can give you extensions as necessary.
  
  The one thing you don't want to do is just wait until they decide you are not making any efforts to repay the obligation and place the property into foreclosure. The more proactive you are, the better your chances of retaining some equity in the home.
  Reply to Michael

6 Steps for Heirs — How to Repay a Reverse Mortgage After Death

Step 1: Accessing Your Most Recent Reverse Mortgage Statement

Step 2: Engage with a Senior Real Estate Specialist

Step 3: Securing Title

Step 4: Decide If You Wish to Sell the Home or Walk Away

Step 5: Communicating Your Intentions to the Reverse Mortgage Lender

Step 6: Handling Personal Belongings and Estate Sale Preparations

Top FAQs

Do you have to repay a reverse mortgage?

Can you pay back a reverse mortgage early?

What happens if you don’t pay back a reverse mortgage?

Can heirs walk away from a reverse mortgage?

What happens if you inherit a house with a reverse mortgage?

How do I find the company that services my parents’ reverse mortgage?

How can I prove I am the heir to my mother’s house?

Can heirs pay down the loan and make monthly payments on the remaining reverse mortgage?

Can I keep my mother’s reverse mortgage if I can’t secure financing?

How long does a reverse mortgage lender take to accept a Deed in Lieu of Foreclosure?

Is there a penalty for leaving personal belongings in a house that we will let go into foreclosure?

Is adding an alternate contact sufficient to converse with the lender and sell my home?

Have a Question About Reverse Mortgages?

Over 2000 of your questions answered by ARLO™
Ask your question now!

Leave a Reply to This Article

See exactly how much you qualify for — with zero pressure.

This week’s rates, and what moved them.

Programs

How It Works

Calculators

Company

6 Steps for Heirs — How to Repay a Reverse Mortgage After Death

Step 1: Accessing Your Most Recent Reverse Mortgage Statement

Step 2: Engage with a Senior Real Estate Specialist

Step 3: Securing Title

Step 4: Decide If You Wish to Sell the Home or Walk Away

Step 5: Communicating Your Intentions to the Reverse Mortgage Lender

Step 6: Handling Personal Belongings and Estate Sale Preparations

Top FAQs

Do you have to repay a reverse mortgage?

Can you pay back a reverse mortgage early?

What happens if you don’t pay back a reverse mortgage?

Can heirs walk away from a reverse mortgage?

What happens if you inherit a house with a reverse mortgage?

How do I find the company that services my parents’ reverse mortgage?

How can I prove I am the heir to my mother’s house?

Can heirs pay down the loan and make monthly payments on the remaining reverse mortgage?

Can I keep my mother’s reverse mortgage if I can’t secure financing?

How long does a reverse mortgage lender take to accept a Deed in Lieu of Foreclosure?

Is there a penalty for leaving personal belongings in a house that we will let go into foreclosure?

Is adding an alternate contact sufficient to converse with the lender and sell my home?

Have a Question About Reverse Mortgages?

Over 2000 of your questions answered by ARLO™ Ask your question now!

Leave a Reply to This Article

See exactly how much you qualify for — with zero pressure.

This week’s rates, and what moved them.

Over 2000 of your questions answered by ARLO™
Ask your question now!