Question From Doyle W. on 7/12/2020
My parents had a reverse mortgage loan and at the time of the loan they were both Incompetent. The loan was taken out in 2015 my mother was diagnosed with Alzheimer’s in 1990 And My dad was Diagnosed with COPD in 2000. What can I do I need to do?
Borrowers lacking competency can still get a reverse mortgage utilizing a properly executed Power of Attorney that meets HUD requirements. They can also use a court ordered conservatorship if neither retains competency and the court assigns a conservator.
I am not a physician and do not know all the ramifications of COPD but my understanding is that while it is a difficult lung disorder, I’m not aware of the illness rendering patients incompetent to direct their affairs as is the case with Alzheimer’s.
If your father was mentally competent and had Power of Attorney for mom or another individual had Power of Attorney (POA) for one or both, the loan could have been closed legally with the person retaining the POA attending the counseling and signing the loan documents.
I would suggest you look at your parent’s paperwork if you are able to locate it and see how the loan was closed. If dad acted as mom’s POA under a validly signed POA (one that she signed before her doctors determined she was no longer capable of understanding and directing her own affairs), the loan was closed in accordance with the law and HUD requirements.
If you can’t find their paperwork, you may need to contact an attorney to determine the next step you need to take because unless the borrowers have already given the lender authorization to work with you, the lender cannot by law, divulge any information to a third party about the loan.
It could be that you need to apply for a conservatorship if dad is not competent now, but your attorney would need to advise you in that regard. If dad is still competent but just ill from the COPD, he can still sign an authorization for you to work with the lender and they with you on all things concerning the loan.
Once the lender has verification of the conservatorship (the legal right for you to work on behalf of your parents) or the signed authorization from dad, they can work with you and provide you information on the loan. I would really encourage you to see if you can find their original paperwork as that would be the fastest and least expensive way to determine how the loan was closed.