Home / Ask the Experts / Heirs and Maturity
reverse mortgage heirs and maturity questions and answers
Close this window

Ask our Experts a Question

There is never any question too big or small for our experts to handle. We encourage you to ask anything you wish. Our experts have decades of knowledge and love to educate people on the subject of reverse mortgages.
 
Sending Your Question
* Your privacy is very important to us, we will never sell or give your email address or info to any 3rd party unless you give us express permission to do so.

Reverse Mortgage Heirs and Maturity

Accurate, Up to Date, Reverse Mortgage Information & Answers from our Experts.
 

Answered By Our Experts

Question From Robert H.
12/13/2017
IF YOUR HOME WAS APPRAISED AT $190,000 AND YOU BORROWED $100,000 WITH A 5% INTEREST RATE IN ABOUT 15 YEARS YOU WOULD BE OUT OF EQUITY IF YOU MADE NO PAYMENTS. WOULD YOU GET FORECLOSED AT THAT POINT AND HAVE TO MOVE?
Expert Answer

Hi Robert,

You're assuming no appreciation but no matter, even if the home goes down in value, as long as you continue to pay your taxes and insurance you can live in the home for life regardless of what the value does.

Do you have a question? click here for an answer
Question From Pat G.
12/12/2017
I am interested in purchasing a home that is currently listed for sale with a broker under HUD Guidelines 24 CFR 206.125. These guidelines are for a home that had a Reverse Mortgage and has been foreclosed upon by the lender. The owners died with a large outstanding balance on a RM that was secured at the markets peak around 2008. They both died about 3-4 years later when the home was worth much less. The home has been vacant since then so it has continued to drop in value as a result of neglect. I understand that heirs are/were offered the option to purchase the home at 95% of the appraised value and the balance of the non-recourse loan is forgiven. I am assuming this option was offered to the heirs after the owners death and they probably turned it down. The heirs either signed over the deed willingly or the bank eventually foreclosed and took ownership of the property. The owners died 5 years ago and the house just came on the market today. I am assuming the heirs did not hand over the deed and the bank went through the long, lengthy foreclosure process. Regardless, the bank now own the property. I believe that the purchase option is available to the heirs immediately upon the owners demise.Is that option available to any family member or must the property have been passed to them in a Will? And does that option expire after the property is foreclosed upon by the lender? The home I am interested in purchasing is now listed for sale with a broker using the above HUD guidelines. Can I assume that the purchase option (for the heir) was presented and declined? Or is it still possible that the heir can purchase the property at the 95% discounted price (appraised value - 5%) even though it has already been foreclosed upon and is now listed for sale with a broker?
Expert Answer

Hi Pat,

If HUD now owns the property, the heir chose not to exercise their option to pay off the loan at the lower of the outstanding balance of the loan or 95% of the current market value and retain the property.  The property is now listed for sale and if you are interested in buying the home, you can purchase under the HUD Guidelines you reference.  I have read that heirs can still purchase using the 95% formula at this time, but I have no personal knowledge of this fact.

However, once the seller accepts an offer and a contract for sale is entered into (in other words agreement by both parties), the seller could not void the sale and sell to another party instead unless your sale fell through for some reason.  In other words, if the heir came along and wanted to buy the property they may have the ability to do so at the 95% number, but if the property has already been sold, they cannot “bump” the purchaser to buy the home at that time.

Do you have a question? click here for an answer
Question From Valerie M.
12/11/2017
Hi, My father lives in Maryland & has a reverse mortgage. He wishes to sell the property, the present loan amount is $85,000 & the realtor states that my father would be lucky to get $80,000 for it. What happens if it sell for $80,000, but loan is $85,000? Help please...
Expert Answer

Hi Valerie,

Your father can continue to live in the home for life without having to make a payment, regardless of what the balance is or what the value of the home is.  If he is unable to remain in the home any longer and must leave, the reverse mortgage is a non-recourse loan and the lender can only look to the property for repayment of the debt.  If dad has to leave the home, you can contact the lender to see if it is possible to arrange for a Deed in Lieu of Foreclosure.

Do you have a question? click here for an answer
Question From Erin
12/08/2017
My mother is now 65 years old and got a reverse mortgage at age 62. Listed as the borrowers are her and my sister. After my mother dies Will the terms of the reverse mortgage continue on as it is now only it will just be property of my sister? Or once my mother dies will my sister have 3 to 12 months to decide what to do with the property next? Does this reverse mortgage die with my mother or does it carry-on with my sister since she is listed also as a borrower equal to my mother? Why would have my mother put my sister on the reverse mortgage listed as a borrower along with her on this?
Expert Answer

Hello Erin,

Let me start with your last question and work backward.  I can’t say why your mom chose to add your sister, you really need to ask mom and sis that question.  There is no requirement of it in the loan so they did that for reasons of their own and I could only speculate.  If they are both living in the home, are on title to the property and are borrowers on the loan, then if mom passes, the loan would not be due and payable until the last borrower on the loan permanently left the home.  However, you keep saying your sister and not your mom’s sister so that leads me to believe that your sister was not also 62 at the time your mom got the reverse mortgage (unless she was of a different marriage) and if that is true, then your sister would not have been able to also be a borrower on the loan. 

The only time the program allows for an eligible non-borrower to continue to live in the home after the borrower passes is in the case of an eligible non-borrowing spouse.  Your sister would not qualify as a non-borrowing spouse and therefore, even if they added your sister to title after the loan closed, the loan would still be due and payable when your mom is no longer living in the home (whether because she passed, moved out to assisted living, or what).  So from what you are telling me, I can see no way that your sister will be able to just keep living in the home without paying off the reverse mortgage when mom passes.

She can do this by refinancing the loan with other financing in her name, with other funds available to her or by selling the home.  The lender will contact her as soon as they become aware of the passing of your mother and she should have a good idea of her plan of action before this time.  If she presents them with a plan, they will work with her to allow her to sell the property or to complete the financing but they will not wait for 12 months then start some action to repay the obligation.  

Do you have a question? click here for an answer
Question From Sophie T.
12/07/2017
When I must pay back the reverse mortgage?
Expert Answer

Hi Sophie,

The loan becomes due and payable either when the last borrower on the loan is no longer living in the property or if there is an early payment event.  This means as long as at least one of the original borrowers is still living in the home and you have not triggered an even that would require you to repay the loan, the loan is not yet due and payable.  So it’s easy to know if you’re still living in the property, but what constitutes an early payment event? 

If you leave the home for more than 12 months, that would be a permanent departure and the lender can call the loan due and payable even if you planned to move back into the home at a later date.  Just like any loan, you are required to keep the taxes and insurance current and failure to do so could require the lender to advance funds and ultimately call the loan due and payable.  Also, just like any loan, you are required to maintain the home in a reasonable manner.

This does not mean you have to have the most upgraded or perfectly groomed paint and landscaping in the neighborhood but if the city is about to lien or condemn the property because the weeds are so high it is a fire and safety hazard or the pool is so green that the mosquitos are breeding and they need to bring in an abatement squad, that is not adequately maintained and could lead to an early repayment requirement if not corrected.  Assuming no breeches, you may continue to live in the home for the rest of your life without having to make a mortgage payment (you do have to keep the taxes, insurance and any other property charges current).

Do you have a question? click here for an answer
Question From Donna
11/20/2017
I have contacted the daughter of a neighbor of mine to ask about her father's home that he has moved out of. Due to his age and health he has moved in with one of his other children. He has a reverse mortgage on the house. The family has started the process of doing a DIL. Apparently an appraisal has been done already but the family has not received a copy of it. The daughter says they have until 11/30 to make a decision. Could I purchase this property from them. And if so if appraised value is less than loan valve can I purchase it at 95% of appraised value? Do I have to use a realtor? And would the fees the seller be responsible for be part of the appraised value or on top of that? Example loan value to 182K lets say appraised value is 175K. Also taxes have yet to be paid for the year.........who would be responsible for those. Thanks
Expert Answer

Hi Donna,

The 95% payoff is only available to heirs.  If you are interested in buying the home though, I would let the current owners know that you would like to make an offer for the property and see if the lender and HUD will accept a short sale price on the home.  If your offer comes in around the 95% range of the current value, that might help the current sellers and it would certainly keep the lender and HUD from having to take back the property, market it and then sell it.  I can’t tell you that they would accept your offer for sure, it would depend on all the factors and whether or not there are other issues involved that would need to be considered that might affect title, etc.  

Do you have a question? click here for an answer
Question From Liz B.
11/19/2017
I am an heir but no will was left.I am in the home its been in family 55 yes.after my dad died Kathy did reverse mortgage on a slam and used all up.but I want to buy it or strange payments they are going to auction it off in a couple weeks what could I do? I have 26 animals on a farm 5 cars and truck and etc.including my dads mule
Expert Answer

Hi Liz,

If you had been the heir of the owner who had passed, you would have a number of options but if you are this close to a foreclosure auction and it sounds like the title was no longer in your dad’s name, it would have been much more advantageous if you had acted more quickly.  It has to be close to a year or more since the last owner/borrower passed and the time to act really should have been as soon as that happened. 

It sounds as though there are other issues besides just the loan as the person you refer to as “Kathy” had to have title to the property in order to do the reverse mortgage.  My suggestion would be to check with an attorney to see what options you have to delay the sale to give you time to perfect title (if that can even be done at this time because it sounds like Kathy had title to the property last, not your father) and then pay off the existing loan with a new loan of your own.  You are going to have to acquire the title in order to get a loan or your own and if you have not done that yet, your attorney is the only one who can advise you regarding the steps required to gain title as the heir which would give you the right to replace the loan with your own financing.  Again, time is not on your side at this point.  You need to act quickly before the sale date to see if there are options available to you because if you wait until after the sale date, I fear you are too late.

Do you have a question? click here for an answer
Question From Eleanor M.
11/08/2017
If a property has a reverse mortgage and it goes to foreclosure, is there a 1 year redemption period from the date of foreclosure since the HUD Mortgage - "United States of America" was mentioned in the foreclosure due to the second mortgage?
Expert Answer

Hello Eleanor,

The laws regarding foreclosures in the area where the property is located would dictate any necessary advertising or redemption periods.  The timing will follow the laws in the state and there will also be notification requirements that the foreclosing entity must follow.

The fact that the loan is a HUD insured mortgage does not change the laws of the state regarding foreclosure.  The fact that HUD was listed as the owner of the loan would just indicate that the lender had assigned the loan to HUD and the lender no longer owns the rights to the loan.

Do you have a question? click here for an answer
Question From Eilene S.
11/08/2017
What happens if nothing is owed on a reverse mortgage when the entitled borrower dies?
Expert Answer

Hello Eilene,

The reverse mortgage is a loan that is a bit different than other loans but is the same in many respects.  The difference is that the borrower can live in the home for life without having to make any payments on the loan for as long as at least one original borrower on the loan still occupies the property.  The loan becomes due and payable when there are no more original borrowers still living in the property so this is different from a standard loan where borrowers take out a loan for a given amount and make payments for a given period of time and then the loan is paid in full at the end of that time period.  The way the loans are the same is that borrowers still own their home in both cases and they only owe what they borrowed plus any interest that has accrued, minus any repayments they have made. 

Firstly, if the reverse mortgage ever hits a 0 balance, the loan is paid in full and closed.  But let’s assume that the balance is very low and instead of owing nothing, the borrower only owes $1,000.  Then the borrower’s heirs can pay the loan in full by paying the $1,000 plus any interest due for that period and keep the property or sell it or do whatever they choose but regardless of the loan available to the borrower, the only amount that has to be paid off is the amount actually owed.

Do you have a question? click here for an answer
Question From Tomo
11/07/2017
My question is. Currently, I live in my parents house (who both has deceased 3 years ago) and they did reverse mortgage with American Advisory Group. It has been 3 years and the house is being borderline for foreclosure. My sister is not cooperating and comprehending the situation. I am trying to keep the house, but it is not going too well. I would like to know if I can refinance or something for me to keep the house? At this moment, I am trying to build my credit score. I have poor credit score at this time
Expert Answer

Good Afternoon,

The owner of the property absolutely can refinance the loan and that is the best way to proceed if you want to keep the home.  With regard to your sister, I can’t advise you there but you should make sure she understands that if the lender does go through the foreclosure, neither of you will own the home at that point and the only way either of you will get anything from the foreclosure sale is if someone outbids the lender’s opening bid which will equal the amount that is owed to the lender plus any costs to foreclose.  

Do you have a question? click here for an answer
Question From Sara
10/31/2017
My dad said that he was the borrower on the house and my mom was not due to her credit but we looked and she is on there as a co-borrwer does that mean she has no rights to the house, even if she passes away?
Expert Answer

Hi Sara,

I’m sorry but I can’t answer this.  I don’t have enough information on the title to the property and even if I could see the current title, property rights questions land ownership/heirship rights are best directed to qualified legal representatives.  

Do you have a question? click here for an answer
Question From MICHELLE R SNYDER
10/27/2017
My mom's house did sell for more then was owed and the district court is holding the remainder, how do I go about getting it. They sent me a letter but not how to get it.
Expert Answer

Hi Michelle,

If it is a court holding funds, I do not know why or what you would need to do, that would be a legal question you should approach with a legal representative in your area.

Do you have a question? click here for an answer
Question From Yolanda C.
10/19/2017
My Mother has a reverse mortgage. She is in end stage COPD. The heirs do not want (nor can afford to purchase) the home. Question 1. Mother has roommates ( non family members). Who tells them to leave on her death or placement in a nursing home. Question 2. Do the heirs have to sell the house or can we contact the mortgage holder.
Expert Answer

Hi Yolanda,

My suggestion is that the heirs contact a local realtor and determine if there is any equity in the home.  If so, you can sell the home and retain the equity after the payoff of the reverse mortgage.  There are many elder specialists who work with heirs and often also know how to set up estate sales and provide other services as well if those would be of benefit.

If the balance of the reverse mortgage is higher than the value of the home, the heirs are not required to do anything.  The loan is non-recourse which means the lender cannot look to any other assets to repay the debt and therefore the heirs can simply choose to contact the mortgage lender and let them know you will not be taking title to the home and that they should proceed with whatever action they need to secure the property if that is your decision.

Do you have a question? click here for an answer
Question From Chuck W.
10/14/2017
What happens in a case where there was no Will left by the individual specifying a executor? Because of this the lender would not even speak with us regarding the purchase of the property by the family.
Expert Answer

Hi Chuck,

It is not the lender's call with whom they can and cannot speak.  The lender cannot decide which family member is to get the home and it is not the lender's home to sell (unless the home goes back to the lender through a foreclosure action).  If the owner died without a will, known as intestate, there are ways under the law for family members to seek ownership of the property but that is not the lender's call.

If you as family members are looking to own the property, I would suggest you contact an attorney in the area to see about obtaining the home through probate.  If you are awarded the home by the court as heirs of the deceased homeowner, then you would still have to pay the mortgage of the now due and payable reverse mortgage but the lender would now work with you as you have legal standing with the property and could discuss all options available to you.

Do you have a question? click here for an answer
Question From Lisa T.
10/05/2017
My dad passed away in August of 2014. He had a reverse mortgage. My brother and I do not want the home - the balance on the mortgage is WAY higher than the value of the property/home. (Shame on them for doing such a mortgage in 2008!!!!). My dad's attorney has been dealing with the mortgage company/attorney telling them we do not want / can not afford the home. They are threatening to foreclose. We have offered a deed in lieu and they continue to serve us with court papers and my dad's attorney has gone to the 2 court dates and told them we (my brother and I) are not responsible and do not want the home. Foreclose...we will provide a deed in lieu on behalf of his Trust. The only asset he had was the home and the only debt he had was the reverse mortgage. Now my dad's attorney sent another letter offering the deed in lieu after the last court date 3 days ago. If they do not accept this, she is withdrawing as the attorney because it has gone on for so long and is a waste of everyones time!!! What can we do? Will we need to hire an attorney moving forward? This is rediculous and seems like harrassment at this point since my brother and I had nothing to do with this property or reverse mortgage!!! Any advice is greatly appreciated! Thank you.
Expert Answer

Hi Lisa,

The reverse mortgage loan is a non-recourse loan.  This means the only asset the lender can look to for repayment is the home itself, nothing else.  You and your brother signed nothing agreeing to pay for nothing and so you have no liability.  As long as you have already removed all of your or your dad's personal property, if the lender takes the property back via a foreclosure action, there is no harassment and no ill-effect on either of you.  In fact, since the lender knows that there is not even an issue with the effect on a borrower's credit after they pass, they do not even report the action against your father for credit purposes as he obviously will not be applying for any credit in the future and the point would be moot.  So my point now is that their "threat" to foreclose is no threat at all.  If you don't want the home, let them.  The foreclosure is filed against the original owners and the individual who signed the paperwork so it has no bearing on you or your brother whatsoever.

I am really surprised that the attorney you have working for you has not already suggested this course of action.  I can't give you legal advice but I would really suggest that you question your attorney about why to even show up in court or do anything on this at all if you don't plan to contest the foreclosure action and don't want the property.  If she has a copy of the documents your father signed, she will be able to see that they only recourse the lender has is to take the property and you've already offered that so if it was me, I certainly would not spend one more red cent attending court or chasing after anything unless there is something about which I am not aware and only your attorney can answer that question.  However, I can think of no reason off the top of my head why you and your brother could not have just sent the lender a letter from the start informing them of your intent not to retain the home and just left it at that and saved a lot of time and money.  I would certainly ask your attorney that question as well based on her analysis of your father's loan documents and the subsequent correspondence she has received from the lender.

The only real decision that you and your brother had to make was whether or not you wanted to sell the home, pay off the mortgage and keep the property or simply walk away from it.  If the amount owed is more than the value of the home, there is no incentive for you to sell the home yourselves.  If you wanted to keep the home and pay off the mortgage, you can do so by paying the lower of the outstanding balance or 95% of the current market value (i.e. if the home is worth $300,000 but the balance on the loan is $400,000 due to the decline in value in the home and the accrued interest on the loan if you want to keep the property you would have the option of paying the loan off at 95% of the current value or $285,000).  If you do not want the home, you can give the lender a Deed in Lieu of foreclosure but the lender may not be able to accept the Deed in Lieu.  If they do so, they also accept any other liens on the property as well and that lien becomes the obligation of the lender.  Sometimes they are forced to go through the foreclosure process so that they protect themselves against accepting any other obligations along with the title to the property because if they foreclose, any junior liens would either have to pay the senior lienholder to protect their interest in the case of a foreclosure or that lien would be eliminated at the foreclosure.  But here again, this would not even affect you or your brother.

Do you have a question? click here for an answer
Question From Kim G.
10/03/2017
After the last borrower passes away and the heirs are not going to keep the house can they sell the appliances in the house at a sale or does the reverse mortgage company keep everything inside the house
Expert Answer

Hi Kim,

Any personal property belongs to the borrower or the borrower's heirs.  Any real property is part of the home and the lender could have a cause of action against anyone who removed said items from the property.  So what appliances constitute personal property and what constitutes real property?  You should check with an attorney in that state if you are not sure but generally items that are attached to the land or the building, those that are built in to the home are real property.  Window air conditioning units that are not built and just sit in the window sill in are typically personal property and do not become a part of the home.  Those that have been screwed into the wall and attached become fixtures and are real property.  Microwaves can be both real and personal property.  A microwave oven sitting on the counter or on a shelf is personal property.  If it is built into the wall, it becomes real property.  Washer and dryer are almost always personal property.  Refrigerators again, depend on whether they are free standing or built in.  Stoves and ovens are an example of an appliance that can go either way depending on whether or not it is attached or free standing.  Fan lights that are attached are fixtures and are real property and thus are part of the home.

Again, if you have any questions about particular items, I would suggest you contact local legal counsel before removing things that could leave you open to legal action.

Do you have a question? click here for an answer
Question From Vickie
9/09/2017
My mother deeded her property to me and my other 3 siblings back in 2014 (signed & notarized grant deed). She informed me that I need to have this grant deed recorded in order for the Deed to be legally binding. One of my sibling's gained power of attorney over my mom in 2017, and is now trying to do a Reverse Mortgage on the property can they do this if the Grant deed is recorded? doesn't this take the property out of my mom's name therefore requiring those on the Deed to consent to the reverse mortgage?
Expert Answer

Hi Vickie,

This is a question for an attorney and I'm sorry, I can't give you legal advice.  I would suggest you contact an attorney in the state in which the property in located because all state laws could also be different.  It could be that the recording of the document gives constructive notice but it does not need to be recorded to be valid but I cannot possibly tell you that for certain because I don't even know where the property is located and again, I could not give you this type of legal advice even if I did.  A competent real estate attorney in the area though could answer this question very quickly (and could also assist with recording the document if needed).

Do you have a question? click here for an answer
Question From Kelly
9/04/2017
Reverse mortgage both parties died but i live her snd disabled with son of parties thst died have to get out?
Expert Answer

Hi Kelly,

The loan becomes due and payable when none of the original borrowers still occupy the property as their primary residence but if the son is the heir, he still owns the home.  He has several options which include refinancing the loan in his name and selling the property.  If he chooses to remain and refinance the loan in his name, he can pay off the existing loan or if the property is valued less than what is owed on it at this time, they would accept 95% of the current market value to pay the loan in full as well.

Do you have a question? click here for an answer
Question From Karen C.
8/09/2017
My parents had a reverse mortgage and have both passed. The home was in a trust to my sister and myself. The condition of the home was such that there was no equity, appraised at what was owed. My son and I wish to purchase it from the trust and my sister has agreed upon a small amount from us to pay for her share. We started talking to a mortgage broker and he has informed us that my son cannot be on the title, only me. HUD says the home is in preclosure, although we have not received any documentation as such. The initial representative at HUD who had received death certificates, trust, etc., letter of intent is no longer there and the initial info was lost, so by the time we found this out and resubmitted, said is in preclosure but we can still buy or sell. The issue is, can my son purchase property with me? He has already invested a large amount of money to renovate the property and I am in the process of either selling or refinancing my current home to buy out the reverse mortgage?
Expert Answer

Hi Karen,

I cannot begin to second guess why the originator said what he said or everything that you can and cannot do at this point with the information available, but the only reason that your son would or would not have been able to buy with you that I can think of based on your statements would be if you are over 62 and he is not and you were trying to use a reverse mortgage at this time to finance the home again in your name(s).  Otherwise, I can think of no reason why HUD would have any restriction on whether it would be you or you and your son both obtaining the home if they have already told you that you can pay off the loan and keep the property.  I have no knowledge why HUD would have any objection to one or both of you owning the home, especially if there is no concern about reverse mortgage qualification.

Do you have a question? click here for an answer
Question From Melissa
7/26/2017
My husband passed away last year but my mortgage is joint tenant. Can I do this?
Expert Answer

Hellos Melissa, How your previous mortgage was obtained has no bearing whatsoever on your reverse mortgage now. Your title needs to be clear and in your name now and there may be some paperwork involved to make sure it is now just your name that usually includes the recording of the Death Certificate by title, but that is routine and we work with this step often. If you live in some states like Texas there may be additional items that have to be resolved with Affidavits of Heirship but in most states, it does not require any additional paperwork or time.

Do you have a question? click here for an answer
Question From Cynthia T.
7/22/2017
After vacating the property and notifying the lender through a transfer of ownership through a deed in lieu of foreclosure, who is responsible for the property insurance
Expert Answer

Hi Cynthia,

The lender has to determine whether or not they can accept the Deed in Lieu of Foreclosure by doing so preliminary research.  There can be no other liens that would affect the lender's security or the lender would not be able to accept the Deed.  Once the lender is satisfied that there are no other clouds on title and has accepted the Deed, it then owns the property and would be responsible for all expenses from that time forward.

This question really deals with the time from notification until the lender takes possession of the home though.  I can tell you that the reverse mortgage is a no-recourse loan.  However, you should seek the counsel of a competent attorney in the location of the property to determine what actions may or may not constitute additional liability in that jurrisdiction.

Do you have a question? click here for an answer
Question From Robert K.
7/14/2017
I was told by Hud some years ago that the set aside could not be drawn on.After my mother's death I was told she could have drawn on it,but the hiers can't,its nearly $8000. What's the truth.?
Expert Answer

Hi Robert,

Heirs can never draw on the loan, only the borrower.  So whether funds were set aside or whether the funds are just left on the line of credit, once the borrower has passed, those funds are not available to the heirs.  Any money not spent would be money that was never borrowed and therefore does not need to be repaid and on which the borrower never accrued interest, but no one but the actual borrowers on the loan may draw any of the funds.

Now the second part of that question is the $8,000 set aside and whether or not the borrower had access to those funds.  That depends on what the set-aside was for.  If the set aside was for future servicing fees (servicing fee set aside), then no, mom would not be able to access the funds either.  Those funds were never borrowed though and therefore would not be included in the funds required for the payoff.  However, if the set aside was for a repair of some sort, once the repair had been completed, those funds would have been available to mom again when she sent in the proof of completion of the repairs.  So unfortunately, I can't just give you a "yes" of "no" as to whether or not this specific set aside would have been accessible without further reviewing mom's closing documents to see what the set aside was for and whether it was always intended as a temporary set aside (until something was completed) or a permanent set aside (to pay future costs for the loan or property expenses).  But again, the heirs can never draw on the set aside regardless of which type of set-aside it was.

Do you have a question? click here for an answer
Question From KAREN K.
7/12/2017
I'm Executor of my brother in law's estate. The property is under water and we vacated it 11 months ago. We requested a deed-in-lieu. I have vigorously stayed in touch with the HUD assigned management company, asking routinely what the hold up was, and 8 key contacts later, one more issue, told the papers were being drawn, then told title had some small scriveners errors, then 2 months later told there lawyer said their were more differences now and that to clear title would cost 200. But management company says that HUD regulations will not let them fix it. I offered for the estate to pay for getting the title cleared. They wrote back: "Unfortunately, when a file is assigned to HUD the prior servicer is paid a monetary consideration and they guarantee HUD that title is clear. When it turns out that it's not HUD simply turns around to them and says give me my money back as an incentive to them to get fixed. This one may have to be repurchase by the prior servicer and if so they have title insurance which will pay. It isn't so much the costs but the principles." Then I asked for the status of the property: They wrote: "The decision to not have the title claim handled isn't exactly a decision, however, it relates more to HUD's rules and federal regulations regarding the assignment of loans to HUD.This is a non-recourse loan and there is no recourse against the borrowers heirs.HUD forecloses federally and doesn't adhere to any state guideline. If the prior servicer is to foreclose then they would adhere to state guidelines and not the federal. So I can only state what our company's position would be as the attorney in fact for HUD. Under federal guidelines we must obtain a foreclosure appraisal to bid at the sale. Federal guidelines state that we must accept lesser of the loan balance or the current market value as payment in full. We want to keep the door open for the deed in lieu in the event that the prior servicer is able to clear title and assign the loan properly. "Here are my questions: Can this end up not federally secured? Their statement scares me about "prior servicer is to foreclose then they would adhere to state guidelines and not the federal." Can a non recourse reverse mortgage loan end up not a reverse mortgage. Also do I need to keep paying property taxes and insurance. How do I make this end for the estate. It's been extremely frustrating! Your advice would be so greatly appreciated! It is so great your company provides help.
Expert Answer

Hi Karen,

I am not an attorney and cannot give you legal advice.  I can tell you though that the loan is non-recourse, now and forever.  The lender has only those rights given to them in the documents the borrowers signed and they cannot change at a later date.  As the heir, you did not agree to pay anything and as a no recourse loan, the lender cannot recoup costs from any other asset of the borrower or their heirs.

I do advise you to seek legal counsel because there may be other ramifications of which I am not aware that have nothing to do with the lender that you need to consider.  Some areas have special fines or assessments for swimming pools that become hazards that are allowed to breed mosquitos, some for weed abatement, some for other reasons and I cannot begin to know or advise about these issues or how it may affect you if you allow the property to fall into disrepair and you are the legal owner.  If you don't pay the insurance, the lender will force-place a policy that will cover only the improvements, none of the contents.  However, I can tell you that the terms of the loan are spelled out and the property is all that the lender may look to for repayment and that cannot change at some point after the loan closes whether the loan is sold or assigned at a later date.

Do you have a question? click here for an answer
Question From Jo M.
6/23/2017
My grandparents still live in their HECM loan home, but they want to sell the home to me there granddaughter as a regular purchase to pay off their loan on the home. I was told that I would have to have some kind of paper work showing, proof of inheritance. Could this be accomplished without having them move out??
Expert Answer

Hi Jo,

I'm sorry but I don't think I have enough information to answer your question accurately.  Your grandparents own the home and can do anything they want with it.  If they want to "sell" it to you, they can just sell you the house and you can use a title company to complete the transaction with the title company requesting a beneficiary's demand for payoff that you would have to pay in full at the close with your funds (whether that be with a new loan or whatever).

But if you are talking about an "inheritance", you are talking about a gift not a sale and then you would be looking at different process.  But regardless of the steps you have to take, it's still their house and they can still do anything they want with it - including give it to you if that's what they want to do.  But then the question becomes how do you intend to pay the loan off that becomes due and payable as soon as the title changes?  If your grandparents sell or gift the home to you, whether they still live there or not and they convey the title completely to you, the loan becomes due and payable and you have to have a means to pay it off.

There is a third choice, especially if you are asking about keeping them in the home anyway.  Under the terms of the reverse mortgage, they can add anyone else to title that they would like and the loan does not become due and payable as long as at least one original borrower is still on the title and as long as one original borrower continues to occupy the home as their primary residence.  So your grandparents can execute a deed to themselves AND you at this time which would not affect the loan in any way as long as they still occupy the property as their primary residence.  If the Deed and vesting they use grants you right of survivorship (usually joint tenancy or tenants in common), when they pass you would become the sole owner of the property.  The loan would still be due and payable at that time, but that might achieve your desired results.

I have to give you my standard disclaimer though - I am not an attorney and cannot give you legal advice.  I do not know which Deed or vesting is best in your state and therefore, I strongly suggest that you seek out competent legal advice to determine if this is the best way to proceed and to prepare any needed documentation to avoid problems or possible property tax implications due to a transfer of ownership.  The attorney may also have advice for you regarding income taxation, etc. about which I do not have knowledge that you should know.  My comments are solely to advise you of your rights under the reverse mortgage loan.  To determine other facts and possible issues, you really do need to speak with a legal representative in the area.

Do you have a question? click here for an answer
Question From Anthony
6/13/2017
Hi my mom died in September 2016 and I always wanted to buy the house. The mortgage was higher then what the house is worth and I could get the house as a short sale 95 percent of appraisal. In my mom's will it says we can sell the home without going to court so I have been working with the bank to buy the house and now they come back to me saying I need to go through probate...the problem is that could take to long and the bank could foreclosure.Now to Dave the house as a beneficiary can I file chapter 13 to stop the auction? Or now can I list the property with a broker and sell. This mortgage company wasted months of time telling me it has to go to probate for me to buy it or sell it.i take blame also for not talking with a probate lawyer months ago but I did not think I had to because the will said I did not need the court to approve a sale...
Expert Answer

Hello Anthony,

You have two completely different issues.  One is the transfer of the title to you and the other is the satisfaction of the loan.  The reverse mortgage terms allow the heirs of the borrower(s) to satisfy the loan by paying the lesser of the outstanding balance of the loan or 95% of the current market value.  So if the loan amount is more than the property is worth, you can keep the home if you wish by paying off 95% of the current market value of the home even though that is less than the amount owed.  If you did not wish to do that, you could allow the lender to take the property back through the foreclosure action and bear no responsibility or cost, but since you do want the home, it sounds like your decision is to move forward with the payoff of the existing loan at 95% of the current market value.

That is the only information about which I can advise you - the items regarding the terms of the reverse mortgage.  If you would like advice on stopping a foreclosure with a chapter 13 Bankruptcy, you really must seek competent legal counsel.  I also don't understand why you would even want to try to list with a broker and sell.  If the property is over-encumbered, to list it would just mean a loss and then real estate commissions would need to be paid on top of that.  For these reasons, I would not be able to advise you on the ability or practicality of adversely impacting your credit to go the bankruptcy route, nor can I see the benefit of listing the home for sale if there is currently more owed on it than it is worth.

Do you have a question? click here for an answer
Question From Vicky
6/10/2017
I live with finance and he has a reverse montages if he should pass how long can I stay in the home?
Expert Answer

Hi Vicky,

I'm afraid I can't answer this question.  The loan becomes due and payable when no borrowers still occupy the property.  I don't know how the title is set up to pass or to whom upon his demise though and I could not comment on property rights of other heirs even if I did have this information, this is a legal matter.

Do you have a question? click here for an answer
Question From Shannon Y.
6/08/2017
CAN RM HOUSE BE SEIZED BEFORE DEATH CERTIFICATES ARE FINAL? I AM UNABLE TO SELL OR BUY ANYTHING UNTIL MY PARENTS ESTATE IS OPENED BY COUNTY AND THEY CAN NOT DO THAT UNTIL FINAL AUTOPSY. MY PARENTS HAVE ONLY BEEN GONE FOR A FEW MONTHS, REVERSE MORTGAGE COMPANY KNEW THEY DECEASED ONLY BECAUSE I TOLD THEM YET THEY COULD NOT TELL ME WHEN COURT WAS OR WHEN THEY WERE SEIZING THE PROPERTY. THEY FROZE THEIR ASSETS JAN 10TH AND BOTH PARENTS DIED BY JAN 31ST. ARE THESE PEOPLE EVEN HUMAN?
Expert Answer

Hi Shannon,

I'm sorry, but I am confused.  A reverse mortgage lender can never "seize" a home or freeze anyone's other assets under any circumstances.  A reverse mortgage is a loan just like any other loan and it is a non-recourse loan at that!  The lender can begin foreclosure proceedings in accordance with the legal documents and the borrowers' heirs have legal rights as well and can often stay those proceedings when warranted, you should check with a local attorney to determine the necessary steps in the area where the property is located.  Even if a lender begins foreclosure, the process is not instantaneous and heirs can still begin the sales process, and contact the lender or HUD for additional time if needed.   

As far as the other assets are concerned, the loan is a non-recourse loan.  Plain and simple, that means that the lender can look to no other assets for repayment of the debt - it cannot seize any other assets.  So when you say they "froze their assets", by freezing their assets, are you referring to the reverse mortgage proceeds?  Because if that is what you mean, then yes, no further loan proceeds are paid out after the borrowers pass, no matter what time frame has transpired (you indicated 21 days before they passed but there would be no reason for that based on your comments).  If the borrowers are not alive to draw assets, then there is no way additional funds could be drawn afterward.  If you are referring to any other assets, it simply cannot be done, legally or otherwise since they have no rights or title to anything other than a security interest in the real property against which the loan was secured.  They don't even own the home unless they go through the foreclosure process and receive the home at foreclosure sale and until such time the home is still owned by your parents or their heirs.

I'm sorry for your loss, but there is something amiss here.   What is the status now?  Have you removed your parent's belongings from the home?  Has the property been listed for sale as of this date?  It's been almost 4 1/2 months, are things progressing so that when you approach HUD and the lender you can show them that you are making an effort to finalize things?  These are all factors they will want to see but as for the rest of your comments, I can't really say anything one way or the other without looking at the entire situation to determine the actual facts because the lender doesn't even have the ability to "seize" a house without going through the legal foreclosure process and they can never freeze assets other on the reverse mortgage program.

Do you have a question? click here for an answer
Question From R Franklin
6/07/2017
Husband died 1 WK ago. Sole borrower on reverse mortgage. Can his daughter purchase home
Expert Answer

If the daughter is the sole heir, she doesn't have to "purchase" the home, she merely has to pay off the loan because she probably already owns the home.  She needs to find out if the father died intestate or if there was a will.  With any luck, there was a trust and daughter became the successor trustee and the property may not have to go through probate.  All this can be answered by an estate attorney.

The loan will be due and payable and the daughter will have to obtain new financing in her own name.   If the outstanding balance on the reverse mortgage is higher than the value, then she can retire the debt for 95% of the current market value instead of the full amount owed, making it possible to still obtain FHA financing in many cases.  For those answers, she should contact a forward lender to review her credit and income for the refinance loan.

Do you have a question? click here for an answer
Question From Gail
6/07/2017
I live in Wisconsin, I lived with mom for over 10 years i was her caregiver and she had a reverse mortgage. My mom passed away march 30th of this year and i have no means to buy this house. My question is can I take the central air unit with me and the kitchen cabinets. The cabinets are old and i know the new owners will replace them anyway.
Expert Answer

Hi Gail,

I'm sorry, I cannot advise you on this matter.  The central air unit and the cabinets are all fixtures under the laws of most states which make them real property and therefore, part of the house.  Ordinarily, I would say that if you took something from a home you did not own, you could have problems.  If the title has passed to you as your mother's heir, then now you do own the home and I guess my first question would be if you can't buy it, have you looked into selling it and is there any money you would gain from the sale? 

This is a matter to discuss with an attorney as any intentional stripping of fixtures in the home could leave you open to prosecution, I just don't know and I would suggest that you determine the sale value of the home compared to the amount owed before you consider any actions.  Maybe the first meeting ought to be with a local realtor, that one would not cost you a dime!

Do you have a question? click here for an answer
Question From Lisa S.
6/06/2017
This is my moms house but I'm on it as co-borrower I'm her daughter. So how does that work can she still do a reverse mortgage. When mom dies and I still leave there with her how long do we have to move out of house. My understanding if she does a reverse mortgage then she no longer has to make payments just have to pay for house taxes each year.
Expert Answer
Hi Lisa,
 
In order to be eligible, all unmarried owners of the property must be a minimum of 62 years of age and live in the home.  You would all be able to stay until the last owner no longer lived in the home, still being responsible for the payment of the taxes, the insurance, and other payments due on the home (HOA, if any) and required maintenance.  If you are not yet 62, you would not be able to obtain a reverse mortgage as long as you were on the title to the home and if you chose to come off of title, then the loan would be due and payable if anything ever happened to mom so it's a very important decision and not one to be taken lightly if you are considering coming off of title in that event to complete the loan.  
 
If you have other plans in place (another home in which to live, family you intend to move closer to anyway, an insurance policy that would pay off the loan, etc) then those would be examples of plans that some folks had to eliminate the ill effects of the loan becoming due.  But if you plan to continue to live there even after mom passes and have no idea how you would pay the loan off at that time, dealing with the grief of a lost loved one is a terrible time to try to add that to the equation.
Do you have a question? click here for an answer
Question From Dan P P.
6/02/2017
We (the heirs) desire to provide a deed in lieu of foreclosure. The house is filled with sixty years of living and "stuff" that we do not want. Is it our responsibility to remove that prior or will that be the Loan Servicer's responsibility?
Expert Answer

In conversations I have had with various servicers, it seems that they are not able to accept a Deed in Lieu of Foreclosure unless the property is "broom swept clean" all personal items are removed and the title is clear.  They do not wish to be responsible for the personal items left in the home and they cannot ignore any other liens that may be on the title (if any).  If you want them to accept the property and not have to continue on, then you should empty the home of all personal effects and then if there are no other loans/liens on title that would create an obligation if they accept a Deed in Lieu of foreclosure, they can do so at that time (and often do).  Otherwise, they will have to wait for the full foreclosure when the law will protect them from liability when all the personal items are removed after the home has been foreclosed upon and/or any other lien holders would take whatever steps they need to at that time to legally protect their interests.  

Do you have a question? click here for an answer
Question From Jim M.
5/20/2017
We wish to proceed with the deed in lieu of foreclosure process for our reverse mortgage. I believe that the time necessary to complete the process could extend beyond the date when property taxes and Home Owners Association fees are next due. I intend to make those payments to avoid delinquency. At the end of the deed in lieu process, can I expect a final closing settlement like that which is typical for a normal real estate closing in that expenses such as property taxes and HOA fees that have been paid in advance by the property owner for periods that extend beyond the closing date are rebated to the property owner, or are those amounts forfeited?
Expert Answer

We wish to proceed with the deed in lieu of foreclosure process for our reverse mortgage. I believe that the time necessary to complete the process could extend beyond the date when property taxes and Home Owners Association fees are next due. I intend to make those payments to avoid delinquency. At the end of the deed in lieu process, can I expect a final closing settlement like that which is typical for a normal real estate closing in that expenses such as property taxes and HOA fees that have been paid in advance by the property owner for periods that extend beyond the closing date are rebated to the property owner, or are those amounts forfeited? 

Do you have a question? click here for an answer
Question From David M.
5/18/2017
I am thinking of getting a reverse mortgage ( RM), but first I need to get advice. My widowed mother got a HECM and borrowed on it. We, my brother and I, did not know this. She died. When we went through her paperwork, we found that she had a balance of over $100,000 dollars on an old house worth $69,000 dollars. We do not claim the house (it is in her name only) and the Rm company wants us to pay the mortgage off. No way! We don't want the house and told the RM company this and they got mad! I know it is a non-recourse loan and our name is not on the house. We want it foreclosed on. Before I decide to get a reverse mtg. I want to know if they can sue us for her loan? She developed dementia and threw out all her paperwork and deeds, so we can't read what is on her RM contract. We know about the loan because of a monthly statement we found. Help!
Expert Answer

Good Afternoon,

I don't know what company you are dealing with but I know most of the servicers and they know as well as you that they have no recourse against you and that they cannot sue you for a debt you never agreed to pay!  The loan states right in the documentation that it is a non-recourse loan and your mom signed the paperwork to obtain the loan, neither you nor your brother ever signed any agreement to pay for anything.  The loan documents for a reverse mortgage specifically state that the security for the loan is the property, not the heirs and not any other assets belonging to the borrower(s).

Your mom paid the HUD mortgage insurance to cover against any losses for just this reason.  The lender will post a claim with HUD, not with you or your brother.  HUD allows heirs to pay off the loan at the lower of the outstanding balance or 95% of the current market value if you do want to keep the home, but you are not required to do so.  Most of the time, lenders and servicers would love to receive a Deed in Lieu of foreclosure to speed up the process, but this is not always possible.  They have to make certain that the title is clear, that the person willing to sign the Deed in Lieu has the legal right to do so and that the property is completely vacant and is in what is referred to as "broom swept condition".  Otherwise, the foreclosure process may have to continue so that the lender is relieved of all legal liability and other liens when they take title.

If the property is completely clear and clean and you have the title now and are able, you may want to offer them a Deed in Lieu of Foreclosure at this time or if you would like to keep the home, tell them that you would like to keep the home and pay off the obligation at 95% of the current value as allowed by HUD.  Otherwise, let them know that you are not responsible for a debt you never agreed to and they can continue their foreclosure process and that they will eventually own the home as is outlined in their loan documents.

Do you have a question? click here for an answer
Question From M. Naas
5/04/2017
If the money obtained on a reverse mortgage is not completely used and there is an amount still available, are the heirs entitled to the difference?
Expert Answer

Heirs are entitled to the remaining equity of your mother's home once it is sold, of course if that is how her will was set up. You cannot borrow any additional funds from her available line of credit, that would be the same scenario as taking her credit cards to the department store and trying to spend money that is not yours to borrow from. 

Do you have a question? click here for an answer
Question From MT
4/27/2017
All Reverse Mortgage originated a Reverse Mortgage on my real property in 2012. I have questions after reviewing my loan documents that I hope you will be able to address. I read information on your website about when a Reverse Mortgage comes due. It makes it sound like as long as you live in the property as your principal residence and meet the property tax, insurance and maintenance requirements you can live in your home, free of mortgage payments for 150 years if you live that long. Is this a correct assessment?I have a fixed rate HECM , line of credit program to pay off existing mortgage and I took one draw of all remaining funds. What happens when I reach the "maturity" date of the loan in 2033, when it will be fully paid off? The Maximum Principal Limit reached? The Deed of Trust states" the term of the Note and Loan Agreement shall end in August 2100 unless the debt matures earlier as set forth in the Note and related documents." Then the HECM Federal Truth-In-Lending Loan Closing Disclosure Statement states "We can terminate your Account and immediately require payment of the entire outstanding balance in one payment if:"The outstanding balance equals the credit limit ("Principal Limit").So how long can I stay in my house? Thank you for your assistance.
Expert Answer

Good Morning,

There are two dates that HUD used in the reverse mortgage that you refer to.  They used to use just the date that corresponded with the borrowers being 99 years old with just the knowledge that borrowers could stay for life but that "knowledge" was not adequate for most borrowers who had long lineage in their families and had some reasonable hopes of living beyond the age of 99.  So HUD added the second date in the Loan Agreement which represents 150 years old since the contract needs to have a conclusion date to be a valid contract in most states.

HUD pushed the date out to a date that represents the borrower being 150 years old in the Loan Agreement knowing that would be more than ample time for any borrower.  The loan allows you to stay in your home for life and the 150 years should be more than ample to cover the life span of any borrower.

Do you have a question? click here for an answer
Question From Daniel
4/18/2017
What if their are no heirs to the borrowers after the last one has left the residence and the property is sold?
Expert Answer

Hi Daniel,

The reverse mortgage is a loan just like any other loan.  The same rules would apply to the property disposition in the case of a reverse mortgage borrower who passed as would with a borrower who had a traditional or forward loan.  Those answers may change with the location of the property, whether or not the borrower had a will or died intestate, whether or not there are heirs.  But the loan does not change those options, it is a loan or lien against the property that must be paid or the lender would eventually have to foreclose to protect their rights and the property would be sold at auction if no heirs stepped forward.

Do you have a question? click here for an answer
Question From Karen J.
3/21/2017
A friend's mother passed away with a HECM on the house. The lender is telling him that they MUST put the house in probate. Have you ever heard of such a thing?
Expert Answer

Hi Karen,

I don't know why the lender has said what they are saying and I know lenders typically won't give legal advice.  Perhaps they are concerned about the title passing to the heir so that the heir can perform any steps needed to complete the plans to keep or sell the house?  I can't say because I know nothing of the circumstances but it might be best to ask them "why" they believe so and then to check briefly with your friend's own legal counsel.  It could just be that the lender is saving your friend from making a costly legal mistake - but I don't know and only a competent attorney in the area can tell you for sure!

Do you have a question? click here for an answer
Question From David M
3/18/2017
I have read a lot of your answers and I am impressed! I am 63 with a wife and paid off house and am thinking of getting a reverse mortgage with you. But, I need to know this: My father died 12 years ago and left my mother with a paid off home near Orlando, Fl. It is old and needs to be completely remodeled as of now. Well, her only two sons, me and my brother, did not know that she had a non-recourse reverse mortgage loan taken out in 2009. She was too proud to ask us for financial help. She passed away and when we went through her papers, we found out that the balance of the loan was way more than the house was worth (house appraised at $79,000 and the loan is $99,500).My brother and I do not want the house. She left us the house in her will and there was no probate on her estate. We donated everything in the home to charity. My question is this: I called the reverse mortgage company and told them we were walking away from the house and didn't want anything to do with it. They wanted us brothers to do the Deed of Heir-ship and maintain the yard, utilities, and home owners insurance ($3,000 per year-due soon!) and wanted us to do about 30 other things ( paperwork). It is not our loan or property. We cancelled the utilities and insurance and when I told them this, they got mad. I know you are not lawyers, but the loan is not ours and I am not going to do their paperwork. . We can't find any paperwork or deeds to the house anyway. Can we just walk away? It is not our business.
Expert Answer

Hi David,

That's funny, I don't remember ever getting a family member or possible heir to sign an agreement in advance that they will take on the financial responsibility for the property under these circumstances.  You signed nothing with them and you have no obligation to them.  If you are concerned about any possible further liabilities with any other entity (state, county, etc.), I would suggest you contact an attorney in your area but your mom had a property she used for collateral for a loan and the lender can only take those actions granted to them in the security agreements.  Since you and your brother never signed anything that made you responsible for financial obligations to the lender or the property, I would suggest that maybe the lender should look to their own legal docs to see what rights they have to request you to do anything.

Having said that though, if you don't intend to keep the home, I myself would do whatever I could to move the title to the lender as soon as possible (deed in lieu of foreclosure, perhaps) but I would suggest a call to an attorney would probably be worth the time and limited expense for a one-time session.  Especially if you have the legal docs from your mom's loan available, I think you'll like the outcome.

Read more about non-recourse features here. 

Do you have a question? click here for an answer
Question From Nancy
3/16/2017
If my daughter is on the deed will that make a difference in the loan?
Expert Answer

Hi Nancy,

If your daughter is on title and you intend to keep her on title, then she would also have to be eligible for the reverse mortgage loan (62 years of age or older) and be living in the property.  The Principal Limit or the amount of money you would receive, will be based on the age of the youngest borrower so her age would dictate a lower benefit or loan amount.  So yes, having a child on title would make a difference on a reverse mortgage loan.

Do you have a question? click here for an answer
Question From Sherri
3/10/2017
Can the heirs sell the house, which has an under water reverse mortgage serviced by Novad, for 95% of the appraisal price, without having to go through probate proceedings? Novad's letter to me, as executor, stated that I needed to be named as executor in the will "and/or" have a probate certificate. Now, with a buyer and contract imminent, Novad tells me that the estate needs to go through probate, which would take 6 months. Has anyone had experience moving forward on a reverse mortgage short sale with a non-probated will?
Expert Answer

Hi Sherri,

The 95% provision is usually reserved for heirs who want to pay off the loan themselves, not sell it to a third party.  I can't speak for the lender, but I can see where they might be concerned that any "sale" from an heir who has not really inherited the property yet may cause issues at a later date when/if there are title concerns and the heir didn't really have the right to sell the property at that time.  If the property has not been through probate, what if there are other heirs that pop up who also claim rights and title to the property?  I can't blame Novad for not wanting to be involved with the sale transaction under those circumstances.

However, that does lead me to ask, if there is no equity left in the property, why bother being involved in the sale at all at this point?  The loan is a non-recourse loan and that means the lender cannot seek repayment from any other assets of the original owner or any heirs.  If there is no equity and you cannot sell the home at this point due to the probation requirements, you can simply walk away from the home with no consequences and let the lender worry about selling it once they receive title through foreclosure.  In the meantime,   you do not have to even worry about the sale and there are no financial consequences if there was no equity anyway.

Do you have a question? click here for an answer
Question From Carol H.
3/01/2017
Do we get a get a step up in basis my mothers house in a non-recourse reverse mortgage is given back as a deed in lieu of foreclosure after the death of my mother? My accountant said no because debt forgiveness reduces step up in basis, is he correct?
Expert Answer

Hi Carol,

I'm sorry, we are not licensed to give tax or legal advice and I cannot weigh in on such matters.  I would not be able to do so even if I had all the parameters of the purchase, sale, improvements, debt forgiveness, etc., because our licensing forbids it but I don't even have those items and so anything I even took a stab at would be totally unqualified and therefore inaccurate.  I would advise that if you feel you are receiving bad information for your circumstances that you contact another, perhaps more senior tax accountant or attorney for a second opinion.

Do you have a question? click here for an answer
Question From Larry
2/19/2017
If I am renting/leasing a room with my parents who have a reverse mortgage and one of them passes away and then the parent passes away later while I am living there, do I have any legal rights to live on the premises and stay there?
Expert Answer

Hi Larry,

If you are their heir and inherit the property, then you would own the property and would have the opportunity to choose whether you wanted to pay off the loan with another loan in your name or sell the property.  If both parents pass though, the loan becomes due and payable at that time and you would have a decision to make.  If there are other heirs as well, then you would have to work that out with your other heirs, possibly amongst yourselves or in accordance with your parents' final instructions or court order if they have no will.

Do you have a question? click here for an answer
Question From Bill
2/14/2017
Reverse mortgage regret, my parents need to sell but have used most of the funds they recived from a reverse mortgage, what should they do.
Expert Answer

Hi Bill,

I'm sorry, I really don't know how to answer this question.  They still own the home and the equity is still theirs and so a lot of their decision may will still be based not on whether or not they used their reverse mortgage proceeds but on how much the property has gone up in value (if at all), how much interest they have accrued and the marketplace in which the property is located.  Most active markets have experienced a good deal of appreciation in the recent years and so there may be a lot of equity still in the home and it may be best for them to sell the home, pay off the balance and keep the proceeds.  If they live in an area where values were hardest hit and their value went down substantially but has not rebounded, they can also be comforted in the knowledge that although they were able to live in the home payment free for a time and may have extracted some or a good deal of equity, they can never be made to pay back more on the loan than the property is worth, regardless of how much money they received or how long they lived there payment free. And the lender can never go after any other assets to repay the debts either.

Their first step would be to obtain a market evaluation from a realtor to see what the home is worth and what would its most probable sale price would be and then compare to the balance owed on the loan.  From there you can start to make some decisions but at least you don't have to worry about the payments crushing them in the mean time because there are none and they can stay there as long as they like until you all devise the plan that works the best for them and their circumstances.

Do you have a question? click here for an answer
Question From Dottie
2/12/2017
I am 69 my husband is 68 our house is paid for we want to put our 49 year old son on the title. We would like to get a reverse mortgage so we can do a few home improvements and travel. Our son has a disability and we want to leave the house for him to live in.Can we get a reverse mortgage?
Expert Answer

Hi Dottie,

You can put your son on title after the reverse mortgage is done but not before.  All borrowers on title when you get the loan must occupy the property and meet the minimum age requirement of 62.  Putting him on title would allow him to avoid probation in the event something happens to you and your husband, he would own the home, but the loan would still come due and payable and he would have to either refinance the loan at that time or sell the home if he was unable to do so and therefore it may not be the solution you were seeking.

Do you have a question? click here for an answer
Question From Helen F.
2/07/2017
My husband has a reverse mtg on a home in Nm. We were not married when he received it, am I responsible for repayment of the RM?
Expert Answer

Hello Hellen,

You are not responsible for the repayment of the loan in any way if you did not sign the legal documents promising to make the payments.  In addition, the reverse mortgage is a non-recourse loan.  This means that the lender can only look to the property to secure repayment on the debt they cannot seek repayment form individuals.  Having said that, if you are the heir who will inherit the property if he passes, you may want to check your equity position to determine if it is in your best interest to dispose of the property and keep the equity if the result of the required repayment is that your husband has passed.  Your best alternative if you are not certain would be to seek competant legal counsel in the the area where the property is located.

Do you have a question? click here for an answer
Question From Kris M.
1/25/2017
Can I get a reverse Mortgage where my home is willed to your company upon my death.
Expert Answer

Hi Kris,

The home is always yours and does not revert to the lender upon your death.  If you will it to a relative and they choose not to step in and either sell the home or pay the outstanding balance with other funds available (as would be the case with a refinance of the loan into their own name) in order to keep it, then they can choose to simply walk away and the lender would have to foreclose on the loan to obtain title to sell the house.  But there is no provision under which they would automatically obtain the title to your home when you pass.

Do you have a question? click here for an answer
Question From Stanley K.
1/23/2017
We plan to marry in 2 months. My lady partner (80) has a Reverse mortgage for 2 years. I (85) submitted a quick claim with and am now on the deed with her. If she should pass away before me what options can I take now to avoid having to sell the home? Also does monthly payments to her cease immediately upon death?
Expert Answer

Hi Stanley,

I'm confused.  If you just signed a Quit Claim Deed, you just further relinquished your possible interest to the property.  If you were being added to the property, it would not have been done with a Quit Claim Deed as this form of Deed just forever relinquishes any ownership in a property, it does not grant ownership to an individual.  For that action, you would use a Grant Deed.  I would suggest that you consult an attorney regarding the ownership rights because one person can add others to title by Granting ownership to themselves and any others they desire but a Quit Claim Deed is meant just to relinquish any ownership claims to a property and does not add additional owners.  I am not an attorney and cannot advise you regarding ownership laws or rights and you really should seek the advice of an attorney for which Deed to use for each purpose.

With regard to the reverse mortgage, if your soon to be spouse obtained the loan before you were married and you were not an owner living in the property at the time and on the loan, then the loan would become due and payable if something happened to her while you were still living in the home.  The payments would cease as soon as the lender became aware of her passing and they would be looking for the plans for the repayment of the loan, whether that was by a new loan or by the sale of the property and satisfaction of the debt.  If you are relying on a Quit Claim Deed to grant you ownership to be able to sell the home to repay the obligation, I do suggest you contact competent legal counsel as soon as possible though because I believe you may have chosen the wrong instrument to convey title (if I am understanding correctly from the comments provided).  I wish you the best.

Do you have a question? click here for an answer
Question From WANDA K.
1/21/2017
20 months after my nephew and myself inherited my deceased parents house in california my nephew, his wife & children are still living in the house. When my parents died their reverse mortgage balance was $430,000.00.we want to sell it but the debt on the house is $20,000.00 more since their deaths plus unpaid property taxes. The house is in complete disrepair because our nephew let the lawn die and the house is filthy but is valued at $510,000.00 if it were in good repair. if we get a buyer how is the money split. The Trust give us both 50% of all and any assets left after they die.
Expert Answer

Hi Wanda,

I'm sorry but this is a question for a competent legal counselor, and possibly ultimately the courts but not a reverse mortgage specialist.  The loan does not affect wills and how heirs will divide an inheritance.  You may want to question the attorney about your nephew's use of the home, the interest that accrued during his occupancy, and costs to rehabilitate the home due to their lack of maintenance and its ultimate effect on the value, but I certainly cannot tell you how that would be decided.  I wish you the best.

Do you have a question? click here for an answer
Question From Kipp F.
1/09/2017
Here's the situation...my Dad passed in 2013 with a RM on the house and it's way underwater (2016 - 100K total owed / 37.5K appraised). I am his first born and only son. I was Dad's caretaker for the last 4 years of his life. Before Dad passed, he designated me as durable POA over all aspects of his life (Dad was going deaf and blind at the time). Dad swore to me repeatedly that there was no will, but 6 months after his funeral, my step-sister produced a will written by my step-mother and signed by Dad that does not mention me. My step-sisters have not cooperated with me regarding probate. My specific question: Can the current lender sell their interest to me? Then I would deal with probate as lien holder on my house.
Expert Answer

Good Afternoon,

I'm sorry but I cannot answer this question for you.  This is a legal question having to do with the rights of heirs and not a question regarding the reverse mortgage itself.  The program allows for the borrower's heirs to either walk away without having to pay a dime or to pay off the existing loan for the balance owed or 95% of the current market value whichever is less (and in this case, current value would definitely be less) but it would not be up to the lender to determine who that legal heir would be.

You could always approach your step-mother and step-sister if they do not intend to keep the home anyway to see if they would be willing to let you act as the heir in this instance since you would have to come in with 5% to keep the home.  If you wait for the lender to foreclose, you could then buy it at that time (foreclosure sale) but you would also run the risk of having to bid against other bidders at the foreclosure sale and those sales are typically all cash transactions.  The lender can't sell you anything it does not own and it does not own the home until and unless it goes through a foreclosure sale and no one bids higher than the lender's opening bid (which is what is owed the lender - the lender cannot raise its bid later).  After the sale, if the lender's opening bid holds and the lender owns the home, it is free to sell the home to anyone at whatever price it can get.

I would strongly suggest that you obtain legal representation in the area prior to that time to determine your actual rights in the matter.  Some states have stronger laws regarding rights of heirs than others and I can't begin to advise you on the matter.

Do you have a question? click here for an answer
Question From Michelle
12/09/2016
My father took out a reverse mortgage on his condo. Now that he has passed, I am trying to disposition the estate. I sent in the documentation to the lender for a deed in lieu of foreclosure (death certificate, letter, affidavit), but is requiring additional information and an inspection. This is still outstanding and now has gone into foreclosure. In the meantime, homeowners dues continue to go unpaid. I am at a loss as to how to handle all of this - I want it over, but am not sure what to do. Am I (or the estate) still liable for the HOA dues? Why is the bank making it difficult to go through the deed in lieu? Besides notification, what are my other obligations to fulfill the deed in lieu of foreclosure? Thanks!
Expert Answer

Hi Michelle,  

I am not an attorney and cannot advise you on this matter.  I can tell you that the loan is a non-recourse loan and that the lender cannot look to anything other than the property for repayment of the obligation.  However, I do not know about the rights of others and could not legally advise you even if I felt I did know the correct answer.  You really should contact an attorney located in the area of the property and I suspect you will be happy with the findings, but again, you should check to protect your rights.

Do you have a question? click here for an answer
Question From Diana
11/15/2016
I am the remainderman in an "enhanced life estate deed" a.k.a. a "lady bird johnson deed" o,r a "transfer on death" deed. There is a existing loan on the property in the name of the grantor. When the grantor dies the property will be transferred to me. Once the property is transferred to me can I then get a reverse mortgage that will pay off the existing debt that is in the name of the grantor?
Expert Answer

Hi Diana,

There is no requirement of a reverse mortgage that states that the loan the reverse mortgage retires was made to the current owner of the property.  As long as you own the property, occupy it as your primary residence and qualify for the loan under HUD's other parameters, it makes no difference that the lien being paid off was made to another individual from whom you inherited the property.

Do you have a question? click here for an answer
Question From Ed
10/31/2016
I'm an estate executor in Virginia. A reverse mortgage was on the home. The company told me I had six months to try and sell the home (which is the goal), with up to two 90 day extensions. I had a listing agreement signed in four months and the house on the market. 10 days later I got a letter of foreclosure sale on the home. Are my rights being violated? I did everything they asked. Now I can't get a buyer because of the looming auction date. Help!
Expert Answer

Hi Ed,

What was the company's response when you asked them this question?  We're not attorneys here and as such, I can't give you any legal advice or tell you if any "rights have been violated".  I can tell you the reverse mortgage process though, usually what is happening in a situation or what to work toward but there is still a lot of information I don't have in order to be much help here.  You say that they told you that you had 6 months to sell the home and there was no other contact until the notice of foreclosure sale?  Most often when I talk to folks they tell of much more contact with the lender.  Did you receive or did the lender ask for any kind of updates during the 6 months? 

The loan becomes due and payable when the last borrower leaves the home and if there was no additional contact between you and the lender for 4 months and the property was still not even listed during this time, they may have thought the property was abandoned and that it was not going to be sold.  Did the lender have good contact information for you during this time and/or did you contact them at all?  I always counsel heirs to contact the lender and keep the line of communication open because if they were unable to determine for over 4 months that the property would be sold, they may have made the determination that they had to take steps to protect their security for the loan.  My advice would still be to contact the servicer and discuss the steps you have taken to sell the home and anticipated timeframes for doing so.  But if you are looking to determine your rights under the law, you really need to seek competent legal representation.

Do you have a question? click here for an answer
Question From Robert
10/21/2016
We will be moving out of our house (with a reverse mortgage) to live with our daughter. My four questions concern contact with the mortgage holder?1. How soon before the moving truck comes should we tell the mortgage holder?2. Do I just tell the utility companies to shut off their services, and that I will no longer pay their bills?3. Our home is in a homeowners' association. What information should I give the mortgage holder so they will pay the quarterly association dues? (And not run up late payment charges and a lein against the property.)4. Some interior paint needs touch-up, and the new owner will, of course, want to replace carpet and probably other 22 year old flooring. Of course, our home is in "liveable condition." What do I need to tell the mortgage holder about the condition of the house when I inform them of our departure?
Expert Answer

Hi Robert,

I can only answer questions about those pertaining to the reverse mortgage.  For instance, I can tell you that the loan is a non-recourse loan and that the lender can never seek repayment from any other assets and can only look to the property for repayment of the loan.  I can tell you that until you leave the home, you are not in violation of your reverse mortgage terms so while I suggest that you contact your lender and discuss your proposed actions with them as soon as you know what you need to do, there is no requirement that you give them any advance notice of future plans.

I cannot make any assertions however about rights of HOA's, utility companies, municipalities, etc.  I'm not an attorney and I cannot give you legal advice.  I would suggest that you contact a local attorney to discuss these issues as they pertain to your plans to be certain that your planned actions not only protect you with regard to the reverse mortgage but also as the legal property owner in all the areas you just listed.

Do you have a question? click here for an answer
Question From Joyce S.
10/18/2016
My husband, 91 yrs old, passed away last month. My only income is my SS of $1178.00/per month. I am 89, cannot walk without a walker, not in very good health. There is no way I could ever pay off our mortgage. I don't even make enough to get an assisted living place. Fortunately I have relatives up north who will let me stay with them. What happens now? What happens to my home and what happens to me? Thank you so much for your helpful advice.
Expert Answer

Hi Joyce,

You should contact a realtor in your area to determine the value of your home.  If your home is worth more than is owed on it, you can sell it and the proceeds belong to you.  If the balance on the reverse mortgage is greater than the current value of the home but you must leave the home for your medical reasons at this time, you just need to make your plans to move and then contact the lender after you have completed your move and make arrangements to give them a Deed in Lieu of foreclosure.  The loan is non-recourse which means that they can never seek repayment by going after you or any other assets you may have. 

Do you have a question? click here for an answer
Question From Verna H.
10/08/2016
My mother died recently and left a reverse mortgage. I am her only daughter and would like to keep the house. I have asked for a 6 month extension to try to get the funding. Can I apply for a reverse mortgage as I am 64 on this house?
Expert Answer

Hi Verna,

The minimum age requirement is 62 so you are eligible.  The first thing you should do is determine the home's value and your Principal Limit or benefit amount to determine if the new reverse mortgage will give you adequate funds to pay off the old loan.  That can be done quickly just by looking at sales of similar homes in the area and then requesting a proposal from the current lender or another lender once you know the approximate value and the amount owed.

Do you have a question? click here for an answer
Question From Lydia A.
9/20/2016
“My father recently died. He took a reverse mortgage in 2010 on his own name only. In Michigan they have a non-borrower program so the spouse can continue to live in the home. The problem is that I have to have a title search. For my dad to get the reverse mortgage, my mother signed a quick claim deed. By her signing the quick deed, does that mean she is no longer on the title of the house. I didn’t know she signed this. When they agreed to the reverse mortgage both of my parents listened to the rules about the reverse mortgage, so I do not understand why the paperwork where only in his name. I don’t my mother to lose her home. both my brother does not have good credit to take over the mortgage.”
Expert Answer

Hi Lydia,

 

I'm not sure what you mean by a non-borrower program in Michigan. All borrowers of a reverse mortgage loan must be a minimum of 62 years of age. One of the practices that we have never condoned that many borrowers participated in prior to HUD's recent changes, was to remove one borrower from title when that borrower was under the age of 62 and just do the loan in the older borrower's name. We had always caution bars against this course of action because if anything happened to the older spouse the younger spouse was left looking for a place to live when the loan was called due and payable.

 

A few years ago HUD change the program and they now take the age of the non-borrowing spouse into consideration and with certain restrictions, allow the non-borrowing spouse to continue to remain in the property even after the passing of the borrowing spouse. However, this was not the case in 2010. If your mother signed a quit claim deed and the loan was done solely in your father's name, and now he no longer lives in the property, that loan can be called due and payable.

 

The first thing that I would check is to see what the current value of the property is. Many properties have experienced a lot of appreciation since 2010. Depending on how much interest your mother and father accrued on the last loan and what the current value is on the property, there is a possibility that your mom can now get a reverse mortgage in her own name (assuming that she is over the age of 62 at this time).

 

The next thing I would do is compare that value to the statement that your mother and father have been receiving to see what the equity position in the property is. This is the information you will need to know to determine whether or not mom now qualifies for reverse mortgage on her own. With any luck, she will have enough equity in the property to where she can do a reverse mortgage on her own and not have to bring any cash into the transaction. Since she's probably younger than your father was, her benefit amount will be lower and they have accrued interest on the old loan so there has to be a good amount of appreciation for this to work. I don't know what the possibility of you and your brothers assisting her if she does have to bring in cash.

 

I would not wait until after the lender contacts you about the loan being due and payable before you look into a reverse mortgage for your mother though. My advice would be for you to find out what your options are before you are contacted by the lender which may not give you a lot of time.

Do you have a question? click here for an answer
Question From David R.
9/20/2016
My stepfather took out a reverse mortgage. My half sister was executor of the estate. She told me of the mortgage company calling 3 weeks after his death and telling her, she had to pay the loan. The woman had no final balance due on the note when she called and said she would get and call her in the next 5 days. She received paperwork from the mortgage company and took it to the attorney, who told her they had to send an appraiser out first to get the payoff amount and the equity amount, therefore, he told her to wait for that to be completed. No appraiser ever contacted her to come out to the house to do the appraisal. She got a call from a man asking if she had sold the house yet, and she told him the house was not for sale. He told her, the house was in foreclosure and he was willing to purchase it. She got a letter 3 days later stating the house was in foreclosure. Giving this information, she called the lender for over a month on a daily basis, not once did the lender call her, as they did not return the attorneys calls either. It was stated the house would go to auction on March 1, 2016. The lender finally called at 4:38 pm on 2-29-2016. She stated that the house would auction in the morning and the one person interested in paying cash for the home was waiting at the bank (for what reason I am not told about, but his attorney was calling the lender as well for two weeks) so I am guessing he did get in touch with the lender. My sister asked for the balance and that was what she was going to tell the interested party waiting at the bank. The woman stated it was too late to pay it, just wait til the next morning at 10:00 am and put a bid in at the auction, that way he would save himself a lot of money. The buyer made out, the lender was paid in full. The family, which consist of my sister and myself got nothing. Then the buyer continued to ask when she would be out of the house. I want to know if the lender calling after the death and not knowing the balance was obligated to call or send a letter stating the balance so she could get a loan or find a buyer? If the man calling before she was informed of the foreclosure had any right to do so? Also, and most important, was the lender obligated to call my sister upon her calling to get this problem handled and stop the foreclosure, and if so what was the time limit? Because I feel the lender waited until the last day to inform her of the payoff amount and it would have been too late to do anything since the banks were closing in less than 20 minutes. I feel that we/I have been cheated on this estate, and I am very upset that my sister informed me she is not going to call for any further information or talk with an attorney over this neglect of communication with my sister so we could have made arrangements to sale and have some equity to divide. I guess I am upset with the fact that I begged them not to do the reverse and it was done anyway, but most of all that when my mom passed my stepfather lied to me, and I think now my sister is lying to me. She won't have a reading of the will, and she has sold off everything in the house except what she wants to keep. But my problem.
Expert Answer

Hello David,

I'm sorry to hear that you're having such problems but one of the biggest areas in which we see issues is between family members when communication breaks down. I do not know in which state the property is located so I can't comment on the foreclosure laws of that particular state but in every state I am familiar with it takes longer than just a month or two to foreclose on the property. I suspect that there has been much more communication than you're being led to believe.

I cannot speculate whether or not there was just no equity in the property and the reverse mortgage balance far exceeded the value of the home or what the situation may have been. I cannot believe however, that if there was equity in the home, that your half-sister would not have taken steps to sell the home and keep the equity for the family. There are also provisions in the reverse mortgage that allow family members to keep the home and pay off the existing mortgage at 95% of the outstanding balance if they wish to do so when the remaining balance of the loan exceeds the value of the property. That does not mean that it would allow you to sell it to a third-party at 95% of the existing balance.

If lenders have an opportunity to sell a property prior to foreclosure they are usually only too happy to do so. So the entire scenario doesn't make a whole lot of sense based on the way it is presented. The facts that you did not want them to do the reverse mortgage, your half-sister is not communicating with you now and it seems that nobody did with you at the time, leads me to believe that there may be more to the story and unfortunately I just can't comment without knowing all the other pieces. Have you tried contacting the attorney that handled the foreclosure with the bank for your half-sister? I don't know if he'll speak with you but I think that may go a long ways toward resolving your questions. He might be able to fill in a lot of the blanks and he might not be able to tell you anything at all. Other than that, you may have to engage the services of an attorney of your own.  The attorney can verify through recorded documents how much the property sold for at auction what the lender's starting bid was and can verify what the value of the property was.

I'm sorry I can't be of a lot of assistance, there are just too many unknowns and anything that I tried to suggest would just be the result of the guess.  I do wish you the best and I hope that you and your half-sister can resolve the communication issue so that everything can be finalized to everyone's satisfaction.

Do you have a question? click here for an answer
Question From Dolores
9/08/2016
Myfather passed and had a reverse mortgage for a few years. I have been his caretaker for a few years. This home is my childhood home. I wanted to purchase the home but since I was talking care of my dad, I only did side jobs and can't show any income. The foreclosure process is in effect and I need to vacate within 24hours. I have no where to go or to take my belongings or transportation. I wanted to file something to the court about how this is an extreme hardship with no place to stay etc. What can I do if anything? Is there something I can try to file with the court? I'm in N.California. please help!
Expert Answer

Hi Dolores,

If you are at the point now that you have only 24 hours to vacate, this is pretty far along in the process and I would really advise that you contact an attorney or possibly a legal rights advocate for your area immediately.  We strongly urge borrowers to be proactive and to seek out legal counsel and learn their options before it gets to this point.  Foreclosure generally takes many months to consummate and the sooner you begin to formulate your strategy the better off you will be.  

Do you have a question? click here for an answer
Question From Glenda
9/06/2016
My mom passed away I am the executor on her will she has a reverse mortgage. Do I have to take it to a probate court to sell her home?
Expert Answer

Hi Gloria,

The Reverse Mortgage will not be the deciding factor as to whether or not there is a court approval required for you to sell the property.  A reverse mortgage is a loan, just like any other loan.  You should speak with an attorney to see how the title is vested and what the law and a title company will require in order to pass insurable title and thus sell the home at this time.

Do you have a question? click here for an answer
Question From Lisa S.
8/01/2016
What happens when a person with a reverse mortgage dies and there is a relative still living in the house.
Expert Answer
Hi Lisa,
 
The loan becomes die and payable so if the relative is the borrowers heir, he/she has to decide if it is better to pay the loan off with other money available or to refinance the loan in that individual's name.  If that relative is not the bo=owers heir, then he or she would have to speak with the borrower's heir (s) to see what their wishes for the property were if they wished to remain in the home. 
 
If the borrower died intestate  (without a will) the relative living in the home would want to again resolve ownership as soon as possible depending on future plans always remembering that the loan was now due and payable. 
Do you have a question? click here for an answer
Question From Brenda P.
7/14/2016
So i was wonderin, with your company in the event the borrower dies unexpectedly and left no will nor had the time to pass the house on legally. What then happens?
Expert Answer

Hi Brenda,

A reverse mortgage is a loan, just like any other loan.  If a borrower dies intestate, their heirs would have to follow the same procedures as with any other individual who passed without a will to obtain their property.  Since the loan would still be on the property and would be due and payable at that time, the heirs would have to make arrangements to retire the debt.

Just as with property that goes into foreclosure due to non-payment after the death of an owner, most state and local laws allow for procedures for heirs to halt any foreclosure proceedings until after the courts have determined ownership but for that advice you would have to seek counsel of an attorney located in the area of the property.

Do you have a question? click here for an answer
Question From Chrissi
6/12/2016
My grandparents took out reverse mortgage, Like maybe 5/6 Years Ago. Since than my Grama has Passed And my Grandpa just turned 90 & still lives in House. But God Forbid, When He Passes, I Was Raised In That House, And Would Try *Any & Every way To Try To save The House. But I Have Lived In An Apt For My Entire Life, And DONT Even Know A lot About Homes Period. What If Anything, Should I B Doing To Help Me Accomplish Getting The House, I Have Pretty Good Credit, But Am On Social Security. My Fiancee Is A Harder Worker, And I Would Do Everything I Can To Try To Get ,Finance Or Refinance, Or Whatever, But I Have No Idea, IF It Can Even B Accomplished.!!!! * Please Tell Me Any Advice U Have, Or Where I CAN Get Advice & Help With This, Once My Grandfather Passes I Will Be Even More Devastated , My Grandparents Raised Me, And It Will B All I Would Have Left Of Them, Plz Someone Help !!* Thx U So Much Everyone. God Bless
Expert Answer

Hi Chrissi,

Your grandparents' loan will be due and payable when your grandfather is no longer living in the property so if you want to keep the home, you should begin looking at various financing options to see which best works for you.  If you are 62 and over (you said you are on social security and I do not know if it is age related), you could apply for your own reverse mortgage at that time as well but being far younger than your grandparents, you may not qualify for as large an amount depending on the loan limits when they acquired their loan, the value of the home at that time versus the value now and interest rates in effect at the time you apply. 

My suggestion would be to check out your qualification based on your age, the current value of the home and use the balance that your grandfather still owes on his mortgage to see if this is a possibility.  Once you know what your benefits are in relation to what he currently owes, you will know if the reverse mortgage is a possibility based on your circumstances and finances.  If a new reverse mortgage is not possible, you and your fiancé may still be able to refinance the home with a standard or forward loan at that time.  You will be able to pay off the existing balance of the reverse mortgage or 95% of the current market value, whichever is less so even if your grandfather owes more than the home is worth (he borrowed all the available funds, accrued interest and the value dropped), you still can keep the home for less than the current market value if that is your desire.  I wish you the best.

Do you have a question? click here for an answer
Question From John Jenkins
5/10/2016
My father had a reverse mortgage on his house. I am trying to get financing to payoff the HECM for 95% of appraised value. Capital One says they "aren't able to do the loan" because "property is subject to short sale to settle reverse mortgage". Can someone explain to me why or better yet what that means in laymens terms?
Expert Answer

John,

A short sale is when a lender settles for less than is owed on a property at the sale, usually due to the fact that they realize that the property is not valued high enough to pay off the entire lien.  This perplexes me though.  Is the loan you applied for an FHA loan?  I am not aware of any forward rules that a borrower cannot apply for an FHA loan on a property that resulted in a loss for another borrower with FHA, but I do not originate forward loans so I am not the best person to ask about that. 

The individual(s) who suffered a loss on the previous loan was not you.  Therefore, you should not be prevented from getting any type of loan at this time.  I would suggest that you consult another lender and ask them about all available loan types if they give you the same answer about an FHA loan.  YOU did not have a short payoff of the loan on the home, your father did due to death and HUD allows for heirs to pay off the loan at 95% of the current value or the outstanding balance, whichever is less.  It would be lunacy for HUD not to allow the financing for a qualified buyer as to do so would mean they would be locking in a bigger loss for themselves.

Check with other lenders, this is completely strange to me and I just checked with one forward lender I know and they said they have never heard of such a thing.

Do you have a question? click here for an answer
Question From Calvin P.
5/10/2016
My mother passed last year August. And no one lives in the home. We all lives in another area of the state. But we been paying someone to keep the grass cut. We cut the electricity off. The amount that they want for the house is more than we can handle. My question is do we have to maintain the property until they decide to take the property? Will we be sued by the city/county if the property is just sitting there? We also didn't pay the taxes and the house isn't insured. We tried to contact the company but they will not answer mor will they call us back.
Expert Answer

Hi Calvin,

I assume that the property is still in your mother's name, correct?  If so, then you are not liable for anything.  I would suggest that you contact a property rights attorney  in the area to determine the city or county's possible repercussions but I would be surprised if they can do anything to anyone other than the property owner, and she has passed.  If they place any liens on the home, they will stay there until paid when the house is sold and that will be done eventually by the new owner...the lender when they finally foreclose and take title to the property.

I cannot give you legal advice but a quick call to an attorney would confirm what liability, if any, you have.  You have none on the loan but I can't speak for the municipalities and you should find out for your own peace of mind.

Do you have a question? click here for an answer
Question From Jason
5/09/2016
Hello. My question is coming from the point of view of the lucky heir of a reverse mortgage. First and foremost my Mother who passed away exactly 1 year ago, the day after mothers day, had a reverse mortgage which finalized the day before she passed away. My question is this. I have lived in the home, which has been my primary residence since Jan. 1, 1989, for the past year since my Mother's passing. I have asked for extensions and have got a probate attorney, and a real estate agent which the house is officially on the market to be sold. Come the 10th of this month, which is only 1 and less than a half days away, the reverse mortgage company, won't say names, is going to start the foreclosure process. It is my understanding that once the foreclosure process starts, I am going to not only loose an experiential amount of money, as far as the homes value, but I will also start to accrue attorney fees of the reverse mortgage company. I am 33 years old, and have been taking care of my mom for a few years leading up to her passing and so I have been unable to show income to be able to either A) get a loan to pay off the reverse mortgage company, which was what I would have liked to have done originally, or B) find a place to live because nobody will take on a tenant that cannot show proof of income for the last 3 years. So, basically, I will be homeless. I guess my main question is, can someone please give me any advise or does anyone know if I am able to speak with H.U.D. to push back the foreclosure process? I have spoken with A.A.G., excuse me, the reverse mortgage company and they have told me that there is nothing they can do because H.U.D. will only give a year max. Please help. Any advise or suggestions would be greatly appreciated. Thank you for your time.
Expert Answer

Hi Jason,

HUD grants longer extensions when the property or market is such that the heirs need a longer period of time to sell the home.  When the market was really bad in different parts of the United States, it was not uncommon for heirs to receive 24 months or longer to sell the homes because HUD knew it would take them just as long.

I don't know your location or your circumstances, why it has taken over a year so far to sell the property, but in most parts of the country, even if they begin the foreclosure as they have stated, it will take a minimum of another 5 or 6 months to complete at this point leaving the lender and HUD 18 months or more out from the time the loan became due and payable as it is.  The best time for heirs to begin making sure they don't run up against a wall on this timeframe is in the early stages, not at the 12 month mark.

If the property is still not sold and it is because you live in an area in which sales are just still that depressed, then I would suggest that you contact HUD directly and plead your case.  If you show them that you have been making a good faith effort to sell the home all along and the delay is market driven, not because you have not been actively trying to pay off the loan through sale or new financing, you may have a chance for more extensions.  You have to remember that the loan agreement or "contract" for the terms of the loan was with your mother and the guarantee was that she could live in the home for the rest of her life, it does not extend for the life of heirs as well.

I wish you the best.

Do you have a question? click here for an answer
Question From Sandy M.
5/08/2016
My dad took a reverse mortgage out on my childhood home a few years ago. He still lives there with my younger sister and her husband, long with their three children. She told me yesterday that she can buy the house from our dad now because he doesn't own it, the reverse mortgage company does, so if she get the down payment she can become the owner of the home. My dad is still very much alive and she can be self centered, so I wondering if this is true. Every thing I have read states that after the person dies or moves out permanently, then the heirs can go after the house and figure out the payments. My dad has a total of four children also, so are we included in the decision making or because she lives there is she more entitled to it?
Expert Answer

Hi Sandy,

I cannot comment on ownership and rights of heirs, that is a legal question.  I can tell you that the bank does not own the home, your father does and when he passes, the home will go to his heirs according to his directions.  I guess the real question is whether or not dad has a will or a trust and has he directed the ownership of the property to pass to specific heirs?  It would probably be best to speak with an estate attorney in the state in which dad lives and probably not a bad idea to ask dad!

Do you have a question? click here for an answer
Question From ANN G.
5/06/2016
AFTER A PERSON DIES, HOW LONG DO YOU HAVE TO PAY BACK WHAT YOU HAVE BORROWED?
Expert Answer

Hi Ann,

After the last borrower on the reverse mortgage permanently leaves the home, whether by moving or by death, the loan becomes due and payable.  Lenders and HUD work with heirs from the point to allow them to either obtain other financing or sell the home and the target moves based on market conditions.  When real estate sales in some markets were absolutely abysmal, HUD put out a chart giving heirs up to 24 months in some areas.  Now that sales are strong in most markets, they would be looking to see the efforts to sell the home and some results much more quickly.

You have to remember that even if the lender were to exercise its right to foreclose immediately, the process would still take close to 6 months in most areas and longer in many others.  While lenders and HUD do not want to own property, if it has been some months since the passing of the borrower(s), at some point they have to make the decision of protecting the asset.  Most of the time we hear that homes are typically sold within the first 12 months and there are no issues but then, we also occasionally hear of family members who have not even put a house on the market after more than 9 months and those often do end up with a foreclosure at least started.

Do you have a question? click here for an answer
Question From Joy H
5/06/2016
We were trying to do a deed in lieu of foreclosure but it was rejected because of a broken door in the home. We are so frustrated with the bank after filling out numerous forms etc and getting nowhere after 5 months. We do not want to put any money into this home that we are just trying to give back to the bank. We have been paying upkeep on the home gas,electric,landscaping for over 5 months. We do not want to put any more money into this fiasco. Can the city come after the estate for lawn care bills if we stop cutting the grass. What is the estate responsible for in regards to home maintenance if we are just going to let them foreclose?
Expert Answer

Hi Joy,

I do not know where the property is located, what the city rights are there and could not advise you legally but I can tell you that YOU did not sign anything with the lender and therefore you have no obligation to the lender for the reverse mortgage loan.  The reverse mortgage loan is a non-recourse loan and they cannot seek repayment from any other assets.

My advice to you is to contact a property rights attorney in the area where the home is located to determine what the city can and cannot do.  Then you can make your decisions accordingly.  The lender cannot do anything if you turn off the utilities, remove your relatives belongings and simply stop doing anything on the home except foreclose on the Deed that the original borrower(s) signed and that leaves you in no worse position than you are in now.  That would alleviate your necessity to make any further investments into the property and it might just speed up the lender.

I think you will find after talking to the attorney that the only thing the city can do is levy liens after doing an abatement of some sort if they need to for weed abatement, etc. and if you never transferred ownership of the property to your names, those liens are against the old property owner who is now deceased and soon to be new owner - the lender who refuses to complete the Deed in Lieu of foreclosure but will be forced to incur additional expenses through an actual foreclosure.  But don't go on my hunch, talk to an attorney to be sure.

Do you have a question? click here for an answer
Question From Larry
5/06/2016
I appreciate your time! Wells Fargo has told us that because my mother has been out of her house for a year (as she is in a nursing home, but hopes to return home if she cannot tolerate her stay at the nursing home due to sharing a room) that Hud will foreclose on her, but the bank can't say what the timetable will be as to how many days before an actual sheriffs eviction will occur. And that is leaving our family very upset with this unknown information. Wells Fargo said that it is up to Hud to make that decision. We expected to have 180 days to vacate the premises as originally told to us by the bank, but now the say that they don't know. We live in Michigan.Also any ideas on delaying an actual foreclosure (sheriff eviction), as in selling the house?
Expert Answer

Hi Larry,

This is a legal question and one that would depend upon foreclosure laws.  If mom has been out of the home for over 12 months, then by the terms of the reverse mortgage, they can call the loan due and payable at this time.  Once they do that, if you do not pay off the balance within the timeframe they give you, they have to begin foreclosure proceedings. 

We are not licensed in Michigan and I am not familiar with the foreclosure laws in that state.  Even if I were, I would advise you to seek the services of an attorney because there are often ways to contest a foreclosure and he/she would be able to discuss that with you in depth.

Do you have a question? click here for an answer
Question From Cynthia M
4/29/2016
After my dad passing, the reverse mortgage company sent an appraiser out, who set up a time to do his appraisal when he could come in and asked me to locate the papers inside (manufactured home) he would need to see before then. He came and did thorough job, in-out-under-over, and mortgage company told us later (after many calls trying to find out what the "95% of estimate" will be, so we can decide if we can pay off the loan to keep this, as dad was very upside down in amount owed,) that his estimate is about half what is owed and they are going to get another one. Question: how many estimates are they allowed to get trying to get an amount closer to the pay off? And still confused with conflicting info saying we can buy it at 95% of estimate and then saying buyer can't be family, must be third party, to get that option??
Expert Answer

Hi Cynthia,

Let's start by answering your last question. I don't know what you mean by saying that the "buyer" can't be family and must be a third-party to get the 95% option. Who was saying that? The heirs absolutely do have the option to pay off the loan at 95% of the current market value or the amount owed on the loan, whichever is less. This option is not forfeited if the heir is a family member. Now you're using another term when you say "buyer".  Heirs don't have to buy the property. They become the owners due to the passing of the original owner. As the new owner of the property in the heir to the estate they have the option keep the home and pay off the existing reverse mortgage at the amount owed or 95% of the current market value whichever is less. If you are attempting to sell the property and not retain the property as the heir, that may be where you and the servicer are miscommunicating.

With regard to how many appraisals can they do, it's a very good question. I don't know what state you're located in but if you are the heir and you now own the home, you should probably check with an attorney in your area as many states have legal requirements that a lender must give a copy of any appraisals done on a property to the owner. This would be a good question for the attorney as well. If the appraiser did a good job on the first appraisal, any subsequent appraisals should show the same or similar value. Any large differences should give you the opportunity to contest the value if you believe the lower appraisal is more accurate. You might also want to talk to a local real estate professional and obtain a broker price opinion. This is not an appraisal but it would give you a good idea of the value of the home as well from a knowledgeable professional selling similar properties in the area. At any rate a local attorney will be to tell you your legal rights.

Do you have a question? click here for an answer
Question From Joanne
4/27/2016
I have been living in my (would have been stepdad's reversed mortgage house 4 yrs. now. We had to place him in long term care nursing home in March 2016. The RM loan amount payback due is higher than the home's value. My mother is his POA and they lived at a separate residence, we all live in NJ. Mother had to apply for Medicaid and they made her have a realtor list this RM home for sale. My fear is this: the realtor insists on having a key lock-box while I am still occupying the house. This really scares me as I live alone. Is this legal? I am more than willing to let the realtor and his prospects in if he calls and/or accompanies them. I was just found disabled this month (after a 4 year wait from SSDI) and I am desperately trying to find housing. Can they throw me out?
Expert Answer

Hi Joanne,

I am not a foreclosure specialist and you really should seek legal advice to determine your rights at this point. I honestly can't advise you but I would tell you that as long as the property is still in your father's name your mother, as the individual who listed the property, has the right to tell the realtor what you will and will not do with regard to a lockbox.

Of course the realtor will do anything and everything that he or she can do in order to sell the home and try to make it as easy on him or her as possible.

As long as your family still owns the property though the ultimate decision as to whether or not you want to comply with the realtors requests for lockbox, rests with you. The situation will change however if the lender has to go through a foreclosure and takes ownership of the property or if your mother signed a deed in lieu of foreclosure granting title back to the lender.

Without knowing what has and hasn't taken place really don't know what to tell you at this point except you should find out what the status of the ownership of property at this time. There are many legal aid attorneys available and I believe it will be well worth your while to seek counsel.

Do you have a question? click here for an answer
Question From Thomas M
4/26/2016
Can you squat in a home being foreclosed from a reverse mortgage? If not how long is the process ?
Expert Answer

Hi Thomas,

I must admit this is a brand-new one for me and I'm not exactly certain how to answer your question. I cannot give you any legal advice and I don't know if it's legal to squat in any property that you don't own. What I can tell you though is that a reverse mortgage is a loan just like any other loan. The loan is secured by real property in the legal documents give the lender the right to call the loan due and payable, or in other words foreclose on the property if the borrower defaults on the terms of the loan. A reverse mortgage lender has the same legal rights as any other lender to secure the property  and those rights change somewhat from state to state. Not knowing where you're located I don't know if there are any "squatter's rights" in vacant homes going through the process of foreclosure in your area. I would imagine that the law would be the same for a foreclosure on a property that was encumbered by a reverse mortgage as by a traditional or forward mortgage, but I can't even tell you that for certain.

The length of time for the entire foreclosure to be completed also depends on a number of different factors and this is something I also can't answer for you. It depends on whether or not the foreclosure is just a straight foreclosure, whether or not there's been any legal filings that require the lender to go through court to clear up any matters of title, where the property is located and whether or not it is a judicial foreclosure or trustees deed upon sale among the myriad of other possible issues. When you consider all those factors, the foreclosure may be nearing the end of its process and may be completed very quickly or it could take a substantial amount of time. There is no one answer that would be accurate in every circumstance.

Do you have a question? click here for an answer
Question From Kim
4/25/2016
My mom has a reverse mortgage and she lives alone and is now in need of a caregiver. Can one of her children move in her house to take care of her as she is not able to live alone anymore.
Expert Answer

Hi Kim,

As long as your mom is still living in the property there is no restriction about who can and cannot live with her. She can have one or all of her kids living with her and that is completely up to her. The only restriction on reverse mortgage is that the borrower still maintains the property as their primary residence so as long as that is the case there is no problem at all having a caregiver with her, family or not.

Do you have a question? click here for an answer
Question From April
4/22/2016
A neighbor of mine passed away and had a reverse mortgage on her house. Her heirs did not want the house or could pay so they let the bank have the house. It is now "abandoned" and I would guess in the foreclosure status. I know the bank as to where the mortgage is and they are not giving me any information. Is there anything I can do? I'd like to purchase the house from the bank. The house still has a fridge fully stocked and no utilities are on so it's becoming run down in a great neighborhood.
Expert Answer

Hi April,

This is not really a reverse mortgage issue. This is simply an issue of foreclosure and property laws in your state. You should be able to check public records to see who owns the property and find out whether or not the bank has obtained ownership through foreclosure at this time. The bank cannot do anything with the property until they actually own it. So if you're interested in buying property checking public records will tell you whether or not the bank even owns it yet.

If the bank does own it, you can make an offer directly to the bank to purchase the property. However, if the bank does not own it yet, there may still be time for you to buy it from the heirs before goes foreclosure sale. My advice to you is to make sure that you have competent representation when negotiating a purchase such as this because if this property is currently in the foreclosure process there will be costs and deadlines about which you have to be very careful and you need somebody who is familiar with the foreclosure laws and the timing of events to keep you from making a mistake in finding yourself in a bad spot.

Do you have a question? click here for an answer
Question From Lisa
4/21/2016
What would happen to someone that was behind on taxes and insurance on their reverse mortgage and became very ill and had to leave home and move in with family to be cared for and he / and family do not have the income to pay this and make the repairs for the house to be sold due to age of home. What would happen to this person if they just walked away?
Expert Answer

Hi Lisa,

The reverse mortgage loan is a nonrecourse loan. This means is that the only recourse the lender has is to foreclose on the mortgage. So given the circumstances that you've outlined, if you know that the homeowner has no intention to return to the property nor do they intend to try to sell the home, I would suggest that you contact the lender and make arrangements to just sign a deed in lieu of foreclosure. Otherwise they would initiate a foreclosure and take the property back that way.

Either way, you and other heirs can rest assured that there is no recourse against you or them and the lender will not go after any other assets of the borrower.

Do you have a question? click here for an answer
Question From Phil S
4/19/2016
An elderly man passes away intestate. He had no Will and no heirs, spouse, or family members to inherit his estate. His estate will be probated by the State (FL). He has a reverse mortgage on his home. Can only family members (heirs) repay the reverse mortgage? or can a close friend or non-family member repay the loan? Is there anyway the current tenant (girlfriend) living in the home now keep the house or repay the loan to remain in the house?
Expert Answer

Good Afternoon Phil,

You have to remember that although borrowers don't have to make a payment and there are a few other differences, a reverse mortgage is just a loan. And when the borrower passes, under the terms of a reverse mortgage, that loan becomes due and payable. Rights of others to step in and assume ownership of the property would be limited by the same property rights laws as if the borrower had a standard or forward mortgage.

I am not an attorney and therefore cannot give you legal advice but I am not aware of any situation where a friend or acquaintance can step in and assume ownership of a property with no legal deed to convey title. I'm sure the lender would be only too happy to receive payoff of the loan but the deceased borrower's acquaintance would still not have title to the property.

You may want to check with an attorney to see if there is some way in which the acquaintance or girlfriend can petition the court during the probation since there are no living heirs and she has a relationship and has been occupying the property but I have no idea if this is possible or how it would work. I wish you the best.

Do you have a question? click here for an answer
Question From Kathy
4/12/2016
Hi my 90year old Mother died in December 2015. She had a reverse mortgage and a will. Her will states all assets will be divided equally between her six children. Since I am not "listed" on her mortgage paperwork am I legally responsible for her now due mortgage? one of my sisters is buying the house we have a purchase agreement & she is in the process of getting a loan. Thanks
Expert Answer

Hi Kathy,

The reverse mortgage is known as a non-recourse loan. This means that the lender can do nothing but go back to the property to seek repayment of the loan if the original borrower defaults. Since your mother has passed, the only asset the lender can look to for paying off the loan is the property that secured the reverse mortgage. If there is remaining equity in the property, then you and your mom's other heirs would benefit the most by either selling the property or by your sister obtaining her loan and paying off the reverse mortgage before the lender has to take any action such as foreclosure.

If there is no equity remaining in the property, then your sister may be paying off the existing loan at just the balance owed or possibly at 95% of the current market value if that is less than the amount owed, but in this case it would be no equity to split with the rest of the family. Either way, you are not responsible for payment of the reverse mortgage. Even if the property or any portion thereof was left to you in a will, the choice as to whether or not to pay off the loan is entirely yours. If you chose to simply walk away from the property the lender cannot seek repayment from you and there is no negative credit implication since you signed no promissory note to repay any loan.

Do you have a question? click here for an answer
Question From Nita W.
4/11/2016
If two names are on a reverse mortgage and one moves what happens?
Expert Answer

Hi Nita,

As long as one original borrower remains in the home, there is no problem with one borrower vacating the residence. As soon as there is no longer at least one original borrower remaining in the home, then the loan becomes due and payable.

Do you have a question? click here for an answer
Question From Laura
4/06/2016
My parents took a reverse mortgage on their home a few years ago. The reverse mortgage was taken out in both of their names. My father passed away in July and my Mother was just notified that the house was in probate because only my Father's name was on the title that is filed with the county recorder. Is my Mom still eligible to stay in the home under the reverse mortgage?
Expert Answer

Hi Laura,

The only way I can advise you on this is to have an attorney review the title and the loan paperwork from the reverse mortgage.  Your mom could stay in the home if both she and your dad were on the loan and on title but if they were, I don't think it would have gone into probate with the notice you describe - but I am not an attorney and you need to seek the advice of one.  If they took her off title to do the loan, the lender could call the loan due and payable and you need to know that sooner rather than later.

Do you have a question? click here for an answer
Question From Judy
3/28/2016
My roommate that owns the home took out a reverse mortgage when he dies can I buy back the house? Or can I buy back the house now? If not how long will I have until I have to vacate the house?
Expert Answer

Hi Judy,

If you are not on title to the property, then the home would go to the owner's heirs upon his passing.  If his wishes are for you to own the property at that time, there are a number of things he can do but you should check with a local attorney since some states have strong rights of heirship for relatives.  It could be just as simple as him recording a deed into both your names now so that when we passes, you would still own the property.

However, that does not resolve the loan.  If you want to remain in the home, you would have to refinance the loan into a loan in your name at that time.  If you decided not to stay, you could also sell the home at that time if you were the owner.  The timeframe is not specifically spelled out in the documents.  The loan becomes due and payable when the last borrower on the loan permanently leaves the property.  Typically the lender will work with you while they see that you are in the process of the sale or the financing but if there is no progress, sooner or later, they have to begin the foreclosure process as that can take up to a year or more to complete in and of itself. 

They would much rather you dispose of the property or obtain your financing and pay off the loan, but if they wait a year to see what you intend to do and then start the process, it could be two years or more before they could secure the property.  Unfortunately, sometimes lenders have to deal with people who have no intention of selling the home and do everything possible just to stretch things out before having to leave the property.  During this time, the property is often left in disrepair or stripped of all appliances and anything that can possibly be removed.  Sometimes it is from heirs, sometimes vandals or thieves.  But the lender and HUD do have to protect the asset against which they made the loan and so the timeframe often depends on you and the progress they see.

I have written all kinds of related articles you can find in this catagory here: https://reverse.mortgage/news-category/heirs-loan-maturity/

Do you have a question? click here for an answer
Question From Shari
3/18/2016
I live with my Mother who has a reverse mortgage. If she adds my name when I am 62 can I stay in the house after her death? thanks for any info
Expert Answer

Hi Shari,

Unfortunately, your mom can't just add someone to an existing loan.  In order for you to be able to be on a reverse mortgage and to benefit from the terms of the financing, you and your mom would have to do a refinance and you would have to qualify based on the new terms available considering the property value and your age as the youngest borrower.

The benefits on a reverse mortgage are determined based on a number of things but one of them is the age of the borrower.  If you were to be able to just keep adding relatives on to the loan as they became 62, the loan would never mature and the program would not pencil out since the loan balance would just keep growing and never be repaid.  

Do you have a question? click here for an answer
Question From mMchael
2/27/2016
My mother and her husband that has passed took out a reverse mortgage - years back - she has now sold the home - we are my mothers heirs - when you complete reverse mortgage papers - is there a part of that document that they ask for beneficiaries - my mother is disclosing no information yet - the house has pending contract - but she attempted to contact me and ask me to sign documents regarding being her heir and offered me $2000 - and i am guessing she has to have my signature regarding this sale - please help because she has yet to send papers and being stubborn and not disclosing information
Expert Answer

Hi Michael,

The reverse mortgage requires no signatures from heirs for her to sell the property.  Anything I guessed at that she requires your signature on now would be just that, a guess.  I would guess that any paperwork requiring an heir's signature would be a result of state or local laws and rights of heirship but it is not a requirement of the loan (and as I said, that is solely a guess).

Do you have a question? click here for an answer
Question From Rhonda
2/25/2016
My husband & his first wife took out a reverse mortgage on the house, she has passed years ago. I'm a new widow Feb, 20,2016. Does the house go to me now?
Expert Answer

Hi Rhonda,

I'm sorry but the two issues are not connected.  One deals with a loan that was placed on the home and the other with the rights of survivorship after a spouse has passed.  Different states have different rights of heirship and I don't know what other heirs your husband had, how the title was vested, if there was a will involved and quite frankly, could not render an opinion on such an issue even if I had this information since I am not licensed to give legal property advice. 

I can give you a little advice though and that is that I would suggest that you contact a property rights attorney in your state as soon as is you can.  If you do not feel you can afford their services, look into a free legal aid in your area, but do talk to someone who is knowledgeable about your rights and your obligations to protect those rights sooner rather than later.  I know this has no specific information regarding your circumstances, but I hope this helps.

Do you have a question? click here for an answer
Question From Donn H.
2/19/2016
My mother passed, age 92,. She and my stepfather, married 14 years, obtained a reverse mortgage on the house she has owned for 50 years about 6 years ago.. She left my brother and me the house upon her death. My brother is the executor. The house was in her name alone. Did not leave my step father anything as he mishandled her money in the worst way. There is a trust. She took the house out of the trust prior to her death. However, the reverse mortgage payments are going into an account that only he has access to in the trust. So what we have here is we inherited a house and are paying my stepfather a reverse mortgage payment of $ 3,000.00 month and he continues to run up credit card bills that are in the trust and in both of their names. He moved out of the house approx. 2 months ago while my mother was dying of cancer. We have tried to get a copy of the promissory note re: the reverse mortgage but have not been unsuccessful. Do we have any recourse or can you give any advice
Expert Answer

Hello Don, 

I've answered yoru question in a new blog post titled "Do Heirs Have Any Recourse to a Reverse Mortgage?"

Do you have a question? click here for an answer
Question From robert lacoerte
1/11/2016
My mother has a house and its under a reverse mortgage she owes 550,000 on it ,if i wanted to buy it from her ,how much do i have to pay!!!
Expert Answer

Hi Robert,

This is a tough question for me to answer.  There are just too many unknowns to give you a straight answer.  I have to assume that mom has not passed since you are using the present tense (she has a house not had a house), so is she selling you the property outright?  If so, the fact that she has a reverse mortgage on the home does not affect the price at which she sells the home to you other than she would have to get at least enough to pay off the current mortgage.  If the house is worth more than the $550,000 she owes, it is up to her as to for how much over the current indebtedness she wishes to sell it to you.  If the home is worth less than the $550,000, then the question would be why would she be selling at this time when she can still remain in the home with no payments whatsoever on the mortgage if it meant she had to live elsewhere at a cost?

The reverse mortgage is a non-recourse debt and if mom owes more on the loan than the property is worth when she passes, the heirs have a couple of choices.  They can choose to just let the lender take the property and dispose of it if they do not want to hassle with it or if they want to keep the home, they can pay off the existing mortgage by paying the existing balance or 95% of the current market value, whichever is less.  So in this case, if your mom has passed and I am making a bad assumption on her still living, you are her heir and the property is only worth $500,000, then you don't have to "buy it", as her heir, you already own it.  You can retire the debt by paying 95% of the current market value of $500,000 or $475,000 and not the entire balance owed of $550,000. 

I hope this helps but if I did not hit your circumstances, please don't hesitate to contact us at (800) 565-1722

Do you have a question? click here for an answer
Question From Carol
1/04/2016
My father passed away 8 months ago and no one is living in the home, can I legally have the utilities turned off?
Expert Answer

Hi Carol,

I would think that whether or not you have the utilities turned on would depend on your plans and goals.  If you are trying to sell the home, then it may be best to have the utilities on and depending on where the property is located, so that pipes don't freeze, etc.  However, if you do not plan to keep the home or sell it yourself, I would certainly contact the lender, let them know that you are not going to continue to pay for the utilities and plan to turn them off.  They may wish to work out a deal with you to take over payment or they may not have any issues with that plan. 

The only other thing I can think of off of the top of my head that you may want to consider would depend on whose name the title is in at this time.  For example, if the title to the property passed to you as a result of a will, etc., then there may be some sort of legal liability if you now own the home and something happened that created a hazard as a result of your actions.  I am not an attorney though and cannot give legal advice so for that aspect, I would definitely suggest you speak with a property attorney in the area before you take any action that might leave you open to liability. 

Getting back to your plans though, if you are not planning on selling the home (that is, there is not sufficient equity in the home to make it worth your while to keep the home maintained until you can sell it), I would suggest that you contact the lender as soon as possible and make arrangements to do a deed in lieu of foreclosure.  There is no personal liability to you or any other heirs on a reverse mortgage and if you do not plan to keep or sell the home anyway and just plan to let it go back to the lender, why not facilitate a quick transfer of the property and end all further expense and work?  This is also something I would suggest that you discuss with a local attorney if you are not 100% certain of the procedures or the benefits.

Do you have a question? click here for an answer
Question From Debi Merante
12/06/2015
Hi. My Mom is now in a nursing home and she has a reverse mortgage on her home. I have an offer to sell it for $5,000 over the amount owed on the reverse mortgage, which is good, but the real estate commission will be $14,000 and I don't have the money to pay that. I fear that medicaid will take the $5,000 profit on the home, which still leaves me (daughter) owing the $14,000 real estate commission. Even if I can apply the $5,000 to the real estate commission, I will still owe $9,000. Also, the property taxes are due and my Mom has the money for me to pay them and I was told I can get that amount back at the closing, but again, not sure if Medicaid will take that money, too. I cannot afford to pay anything so I don't know what to do. Would calling off the sale of the home and abandoning it be an option? I just want to be done with the house without having to pay out any money.
Expert Answer

Hi Debi,

Before you call anything off, I would suggest you contact the lender and give them the option of accepting the sale and paying off the reverse mortgage with the available proceeds.  You are not responsible for any shortfall on the property and the loan is a non-recourse loan which means that the lender cannot seek repayment from any of mom's other assets either.  If the lender and HUD know that you have a buyer right now, they may be willing to settle for their offer knowing that if they have to take the property, market it again and pay those costs, the chances are very good that they will end up losing even more money than they would with your buyer.  As long as your offer is a bona fide current market offer (not well below the actual current value), the lender would be crazy not to just let the transaction proceed and accept the short payoff and put their claim into HUD for the loss.

As I said, you do not have to pay for anything.  You are not on the loan and you did not sign a mortgage agreeing to cover any expenses.  My suggestion is that you contact the lender as soon as possible and tell them that you are giving them back the house but have a potential buyer and ask them if they want to continue the transaction and let them decide whether or not they want to proceed with the sale.

Learn more about Reverse Mortgages & Non-Recourse 

Do you have a question? click here for an answer
Question From Tracie M
11/29/2015
My mother had a reverse mortgage, her house was totally paid off. How can I find out where the money was spent or when she made withdrawals? I found no evidence in her checking account of where the money was spent however, we had to secure a loan and pay off the debt.
Expert Answer

Hi Tracie,

You need to do a few things.  Firstly, get a copy of your mom's closing statement.  I know you are going on the assumption that mom had paid for her home in full and that she did not owe other money before she got her reverse mortgage, but many times we see that families are in the dark about the borrowing habits or the true financial picture of other family members.  It would not even have to be an existing mortgage that she paid off with the reverse mortgage.  She may have had to use the funds to pay off other debts when the loan closed.  The closing statement would show what obligations, if any, (and that could include taxes, other debts, etc) were paid off with the reverse mortgage proceeds at closing.

Next, you could ask the lender for a loan history and ask them if they will confirm to which account your mom's deposits were made (if she had direct deposit).  This would tell you each time she requested funds, how much she received and if she had those funds directly deposited into an account.  Unfortunately though, I know of no way to "track" how she spent her money.  No lender tracks the borrowers' spending of their loan proceeds for any loan that I am aware of, for forward or reverse loans.  But once you have a loan history, you should be able to verify through your mom's receipt of the funds through her accounts with corresponding deposits (provided that she did not use all the funds in the beginning to pay off other liens).  I wish you the best.  Depending on how long ago all of this transpired, it may not be easy to track now after the fact if she did not keep good records and it's not clear.

Do you have a question? click here for an answer
Question From Richard Bentson
1/18/2015
When both borrowers die are their heirs given time to sell the house and pay off the loan, or does the lender take possession of the house, sell it , and give the heirs any funds in excess of the debt?
Expert Answer

Hi Richard,

The lender does not automatically get the house ever.  The home passes from the owners to their heirs and the heirs must decide what they wish to do, sell the home and pay off the loan with the proceeds, refinance it and pay off the loan with the new proceeds and keep the home or pay off the loan with other funds available to them.  We recommend that heirs contact a local real estate professional to determine the value as soon as possible so that they can make an informed decision.  If there is equity in the home, it is in the heirs best interest to move quickly to protect their interest.  If the values have not increased or even decreased, it may make a difference in their decision making.  At any rate, HUD requires lenders to give borrowers and their heirs ample time to sell the home if that is their decision (and that time changes in different markets as those markets change).

If the lender has to take the home back by foreclosure, they do it through a foreclosure sale in which their bid is just what is owed to them.  They do not sell the home on the open market for heirs.  If it gets to the point where the lender is selling the home, it is because they have already gone through the entire foreclosure process and then any loss or profit from the sale goes to the lender.  This is why heirs should use the time that HUD will allow to heirs to sell or finance the home if there is equity still in the property before it ever gets to the point of foreclosure. 

More here: Reverse Mortgages: What Happens After Death?

Do you have a question? click here for an answer
Question From Jill Morlong
1/09/2015
My folks have reverse mortgages my name is not on it but I am on the deed. Their will say that everything is left to me. is their anything around this so I can stay in the house.
Expert Answer

Hi Jill,

As an owner of the home and an heir, you absolutely can stay in the home.  However, your parents did borrower money under certain terms and as the new sole owner of the property when they pass, you will have to abide by the terms of the loan they took out.  Nothing in that loan says who can own the property or what you must do with it once you do own it, it only states that the loan must be repaid once they are no longer living in the home.

If you want to keep the home, that means refinancing the loan with a loan in your name or paying the loan off with other funds.  If you want to sell the home and keep any proceeds, that would be your decision as well.  Knowing your rights now will allow you to make sure that you have all your plans in place when the time comes that you do have to make a decision as to which way you want to act.

Do you have a question? click here for an answer
Question From Wes
11/29/2014
Hello, My dear mother just passed last week. She left me the house as the sole heir. But it has a Wells Fargo reverse mortgage with a balance of $44,500. I have $25,000 life insurance from mom. I have bad credit, but I must keep the home. It is my only residence. I'm single and disabled. How likely will it be that I can keep the house? I really only need $19,500 to pay the reverse off. Will Wells Fargo work with me? Can my attorney find ways to keep the home? I'm grieving and really worried about all of this. Thank you, Wes
Expert Answer

Hi Wes,

I'm sorry to hear about your mom.  I can't speak for Wells Fargo, but there are a few things to remember here.  Firstly, you own the home and to keep it, you are, by your measurements, just $19,500 short of owning the home free and clear.  I don't know a lot of information at this point so I can only give you some blind suggestions.  Firstly, I don't know the value of the home or your age.  If the home is valued at $40,000 or more and you are 62 or older yourself, you can probably get a reverse mortgage on your own and may or may not have to use some of the insurance money to close the loan.  Wells Fargo no longer originates reverse mortgages so you would have to check with other lenders if you think this is the way you want to go.

If you are not over 62, then there are other loan types you can also look at if Wells Fargo is not willing to extend you a new loan.  Again, depending on the current value of the home and your ability to pay mortgage payments and at what amount, you might look into a home equity line of credit, a small first trust deed or check with a local HUD approved housing counseling provider to see what other programs may be available to you for your circumstances.  We only do reverse mortgages and therefore I am not familiar with other programs for disabled individuals, etc., but I would certainly give that a try as well.

I know this is a tough time in your life and it is a very difficult time to begin looking at all these alternatives but I caution you not to wait too long.  The sooner you know what your options are, the easier it will be to take whatever actions necessary in the timeframes you have available to you.  I wish you the best.

Also See: Reverse Mortgages: What Happens After Death?

Do you have a question? click here for an answer
Question From Donna
10/06/2014
My mother got a reverse mortgage in Sept.2013 -- she and my brother passed away in the home in feb.2014 from a fire .Her insurance and taxes were up to date and a check to reverse mortgage has been ready to issue since March 2014..It can not be released ( the amt of the structure or the contents) 2 separate checks. because reverse mortgage refuses to tell us the dollar amount she received. their refusal to tell us the dollar amount due them is also holding up our contents check.why the secrecy and what do we do with the insurance check that has been ready to issue to them all this time?
Expert Answer

Hi Donna,

First let me say that I am terribly sorry for your loss. 

As for the insurance checks, I honestly do not know what is holding them up.  It would be purely conjecture on my part to try to guess what the lender is still researching at this time and why they would hold up any insurance payments.  There may be an issues with many different things, some out of the lenders control that would delay the process.  They may have zoning issues on rebuilding the home, there may be a dispute with the insurance company on the amount that was paid versus the actual loss or, and let's hope this is not the case, if your mom allowed her insurance to lapse, then the lender has to force-place coverage that does not include contents, just the dwelling.  what I do not understand though is why you have not been told what the hold-up is at this point and I would put more pressure on the servicing company to divulge the information.

However, I think I would put a little more pressure on the insurance company as well.  Your mother's lender is also listed a payee in the instance of a claim so that they can be certain the money is slated to going toward rebuilding the home thus protecting their collateral.  However, the insurance company can certainly tell you what coverage your mother had on the contents of the home as well as the lender.  Have they told you why they will not give you the amount of that coverage?  As long as your mothers' policy was in force which covered the dwelling and the contents, then I would at least try to push them harder for the information you are seeking or a valid reason for why they cannot give it to you.

if all else fails, I would seek competent legal counsel.  I don't know the insurance laws and I don't know what they are required to say to whom in such as instance.  Are you now the legal owner of the property?  If so, I would think that you would have rights to get information.  If the house did not pass to you upon your mother's death, there may be privacy laws that are in effect of which I am not aware and that's why you really need to speak to an attorney.

At any rate, let me again tell you that I am sorry for your loss and I do hope that this is all resolved soon.

Related: Reverse Mortgages and Natural Disasters

Do you have a question? click here for an answer
Question From Kathy
9/19/2014
I have had a reverse mortgage in place for over 3 years. Now the bank wants to do another appraisal. Why?
Expert Answer

Hi Kathy,

The Deed of Trust allows the Lender to make reasonable inspections provided they give you prior notice and specifying a purpose for the inspection and that the inspection must be related to the lender's interest in the property.  In other words, if the lender has reason to believe that the property is no longer owner occupied, is vacant or has been turned into a business, the lender, or the lender's agent (an appraiser) has the right to inspect or perform an appraisal of the premises with prior notice.  However, if the lender did not tell you why they wanted to perform such as appraisal, they are acting in violation of the Security Agreement.   They need to have a legitimate reason for the inspection and it's not a secret, they need to tell you why.  The paragraph below is from a CA HECM Deed of Trust:

6. Inspection. Lender or its agent may enter on, inspect or make appraisals of the Property in a reasonable manner and at reasonable times provided that Lender shall give the Borrower notice prior to any inspection or appraisal specifying a purpose for the inspection or appraisal which must be related to Lender's interest in the Property. If the Property is vacant or abandoned or the loan is in default, Lender may take reasonable action to protect and preserve such vacant or abandoned Property without notice to the Borrower.

This action can be the result from the servicer receiving mail back from the post office undelivered or it can be as a result of other attempts to contact you at the subject property being unsuccessful.  At any rate, the lender must tell you why they want to do the inspection and the reason has to be a legitimate reason to protect their security interest - they can't do it "just because".

Do you have a question? click here for an answer
Question From Karen
9/15/2014
The reverse mortgage has been transferred from one servicer to a HUD servicer. After my father's death, my mother moved out of the Florida condo and can no longer afford the maintenance fees and special assessments. After 3 months on the market, there were no bids high enough to pay off the loan so a letter of intent was sent to the loan servicer advising her desire for a deed in lieu. We were advised the property would be inspected, the locks would be changed and the process would take 3-6 months to complete. It is now 3 months in and the inspection hasn't even happened. We need to know if my mother is responsible for the monthly maintenance fee, the monthly special assessment fee for building renovations, utilities and hazard insurance during this process?
Expert Answer

Hi Karen,

I'm sorry, I really can't give you any clear guidance on this and I would really suggest that you contact a local real estate attorney.  As far as the loan is concerned, it is a non-recourse loan and regardless of how much interest accrues, etc., your mother or her estate cannot be made to pay anything to cover any shortfall.  With regard to the rights of other parties, I really cannot comment on what they can or cannot do in any particular area to protect their interest.  If your mother has moved out of the home, she can turn the utilities off, stopping any further costs there.  Her own insurance is probably on a yearly renewal and she can probably choose not to renew her private policy which would require the lender to purchase their own coverage on the property.  I honestly don't know what rights the HOA has if they are not paid (whether or not they can seek to lien your mom) and that's why I really think you should seek the counsel of an attorney and maybe he/she can also speed the process for the Deed in Lieu of Foreclosure.

Do you have a question? click here for an answer
Question From Mary
8/18/2014
My neighbor is not living in her house and has an apartment, but she has a reverse mortgage on this home, but lets her son live there rent free. what to do about this. they always are scamming someone what can I do?
Expert Answer

If you don't know who the lender/servicer is, then the only other possible entity you could contact would be HUD.  You can find the local office just by typing HUD.gov into your web browser and calling the office to report the circumstances.  They insured the loan and I don't know how aggressively they will pursue this but stating that you will occupy the property and then not doing so is definitely a violation of the terms of the loan.

Do you have a question? click here for an answer
Question From Francine F.
8/14/2014
My dad passed April 2012. He owned a condo and had a reverse mortgage. The bank immediately started foreclosure proceedings. Condo is empty. An attorney for the Condo Assoc. has been trying to get me to rent the condo, during the foreclosure proceedings, so the condo assoc. can recoup the maintenance fees for the past 2+years (I could also make money on the rent). I don't want to do it because the bank stops by to check the condo and I feel this is a problem. The condo is in New York
Expert Answer
Do you have a question? click here for an answer
Question From Robert P.
8/06/2014
Will the bank buy a house for the equity left in it when a parent dies.
Expert Answer

Hi Robert,

I'm not sure I totally understand what you're asking so if I don't answer this to your satisfaction, please feel free to contact us back but here goes.  The bank does not buy any reverse mortgage borrower's home.  They are not in the business of buying and selling homes.  They prefer that the borrower or the borrower's heirs retain the property (or sell it) and pay off the reverse mortgage balance.  That is the cleanest and easiest way for all lenders to loan money, Lend the money, receive repayment at the end of the contract and then lend again.  If there is equity still in the home, then you should contact a real estate professional in the area and make arrangements to sell the home if you do not want to keep the home yourself.

The bank has only those rights given to it by the borrower under the security instrument (Deed of Trust or Mortgage).  The bank has the ability to foreclose and take the home in the instance of default to protect their interest but that is not what they want to do.  No bank is looking to increase their real estate owned portfolio and if they do have to foreclose on property, they aggressively market it to get it sold and off of their books.  So if a reverse mortgage borrower passes, had no heirs and the bank had to foreclose because no one inherited the property (or none of the heirs wanted the property), then the bank would do everything it could to sell the home as quickly as possible, if someone else didn't buy the home at the foreclosure sale.  The property would go up for public sale after a prescribed advertising period and then the opening bid is the amount owed to the bank, the bank is not allowed to bid any higher. 

I hope this answers your question but if not, please let me know.

Do you have a question? click here for an answer
Question From Melodye Whitaker
5/21/2014
My mother's Reverse Mortgage company is threatening foreclosure stating that she does not have insurance coverage required on her condominium. The condominium is insured through the homeowner's association and has been continuously insured. The insurance company has faxed coverage information to the mortgage lender. The lender is claiming lack of insurance for the previous 6 months, which makes no sense, and is charging her in excess of $700.00 due and payable in 2 weeks or they will foreclose. Don't know what to do. She lives on Social Security and has no money for this.
Expert Answer

Hi Melodye,

Have you gotten on the phone with the servicer?  I think the problem that you are having is that there is a second policy that covers the interior for condominiums known as a "walls-in" policy and that is probably what the servicer is requesting, but I can't tell you that for sure.  Homeowner's Association policies typically only cover the exterior of the building and lenders also require an insurance policy that covers any damage that may occur from a fire, etc, to the individual homeowner's unit.  Unless the Association policy does this (and I don't remember off hand ever seeing one that did) then the lender would require this coverage as well.  Your mother had to have this policy in place to close the loan.

When a lender has to force place coverage, that policy is always more expensive than one your mother can obtain for herself.  I would suggest that you help her by first contacting the servicer and determining if the walls-in policy is what they are requesting, and then if so, make some inquiries of some local insurance companies for prices.  This coverage is usually very inexpensive and she can probably get a policy that also covers her personal belongings that would be much more beneficial to her if there ever was a fire.  When a lender has to force place coverage, it not only is more expensive, but it also does not insure any of the contents so your mother's furniture and other personal property is not protected at this time.

Do you have a question? click here for an answer
Question From Sue
5/12/2014
My mother has a reverse mortgage and is dying. If she takes out the balance before she dies, does it have to be paid back at her death?
Expert Answer

Hi Sue,

The loan becomes due and payable at the time your mom stops living in the home, whether that is because of death, she sells the house or for whatever reason she no longer occupies the home as her primary residence.  As long as she is still living in the home, she has access to any of the reverse mortgage proceeds available to her under the program.  If she takes all the funds now, then that will just raise the amount owing at the time she leaves the home.

The question of "does it have to be paid back" is the significant question at this point.  Yes, there is a Deed of Trust securing the property for the loan.  Yes, when the property is sold, the lender would have to be paid the amount owed to the lender.  However, the loan is also a non-recourse loan.  In other words, if the loan balance is higher than the value of the home, then the lender and HUD cannot look to any other assets for the repayment of the loan.  So yes, the loan does have to be repaid, it is the terms of the repayment that are subject to some interpretation in those instances where the property is worth less than the amount owed.  And because most borrowers never really know when their time will come, there is no provision in the loan that states that if you take the money available to you within 30, 60, 90 or even 180 days from the date you pass that all bets are off and your heirs must repay the loan funds at that time.  As a reverse mortgage borrower, you are given a set of benefits and you can choose to receive those benefits at any time as long as you are not in default on the mortgage.

I wish your mother well and hope the best for her.

Do you have a question? click here for an answer
Question From Wolfgang Muser
4/29/2014
My stepfather left me with a reverse mortgage to repay if I want to keep the house. How do I obtain a complete record of the 10-year old account? The current servicer (Champion Mortgage of Seattle) is very unresponsive. My fear is they want to push the mortgage into foreclosure asap. Thanks.
Expert Answer

They should be able to send you an accounting of the loan but even more importantly now, I would take the balance off of the current statement and begin to make some quick decisions.  If you talk to local realtors in the area and the property has a good equity position based on the prices for which other similar homes in the area currently sell, then you can decide if you want to sell or keep the house for yourself.  Either of those actions can begin now while you work to get Champion to send you the entire history of the loan.  Also know that if the value is less than what is owed on the property and you still want to keep it, HUD allows you to pay off the current loan at 95% of the current market value or the amount owed, whichever is less.  So if your stepfather's balance is $135,000 and the property is only valued at $100,000, you can pay off the existing loan at $95,000 and keep the home as well - but you must look into obtaining financing in your name if you do not happen to have $95,000 of your own laying around.  If the lender will not cooperate with you after you begin your steps to either finance the loan in your own name or sell the property and still will not give you the information you are requesting, I would advise you to contact HUD directly and inform them that you are trying to settle the estate and property but are receiving no cooperation from the lender.  HUD has to pay any claims on the property and I am sure they would love to see this resolved before a claim is incurred.

Do you have a question? click here for an answer
Question From Sandra
4/25/2014
My mother went into a nursing home three years ago and has dementia. She had a reverse mortgage, no one could pay off the mortgage so it went into foreclosure. The house was sold at a higher price so their is a refund. Did she relinquish her rights because of the loan and therefore not able to collect her refund?
Expert Answer

Hi Sandra,

The reverse mortgage is a loan just like any other loan when it comes to your mother's rights as a borrower.  I would suggest that you contact the lender to request an accounting of the sale and amounts owed.  If the sale exceeded the amount owed to the lender, that would belong to your mother.

Do you have a question? click here for an answer
Question From ALINDA snook
3/02/2014
Your Question...need info.. Ok my aunt passed away couple months ago and she had a reverse mortgage on her place my question is I'm a married couple that wants to take over her place I've been very interested in it and want to keep it in the family I know the land has been bought and paid for by my uncle years ago I've go to her place on a weekly basis to see if it has been broken into I know the whole inside has been striped by squatters and things have been stolen such as electric box water heater gas line and so forth my family cleans up the yard and just do minor details like yard work they say its 24000 how would I go about making payments on what she owes monthly so we can take over
Expert Answer

Hi Alinda,

The property ownership is decided by your aunt and her wishes, just like any other loan.  If she died with a will, then the ownership would pass in accordance with the will.  If she did not have a will, then I would suggest you contact any other family members and an attorney who handles such matters and see what would need to be done to pass the title to you.  Once you know what the hurdles may or may not be to get the property changed to your name, you can contact the lender and let them know of your intentions and they will do an appraisal.  You will have an option to pay off the existing loan with a new loan or sell the property and pay it off with the proceeds, whichever you prefer so if you wish to keep the home, you should also be looking into permanent financing in your name (assuming of course that there will not be any issues with the ownership and any other family members).

I wish you the best.

Do you have a question? click here for an answer
Question From Frank
7/09/2012
In the situation of a reverse mortgaged condo with negative equity... An elderly widowed owner, who has no assets and only receives a minimal income from social security, but had a co-signer for the condo fees, has to move out of the condo permanently, (ie: to a nursing home - who would take the SS funds), and the condo is taken over by the mortgagor... Who would be responsible for the monthly condo fees? Would it be the elderly widow and the co-signer or would the responsibility be passed on to the mortgagor? Thank you, -Frank
Expert Answer

For this question I would refer you to an attorney practicing in the state where the property is located.  This is not question of the loan, but rather the association's rights to seek back association dues and I am afraid I cannot answer this question for you.  The fact that the second individual you refer to is a co-signer indicates that he/she signed documents agreeing to pay certain things and only the attorney can determine his/her obligations in accordance with local and state laws.  I do not know what legal rights that would give to the HOA to seek payment and therefore, a consultation with an attorney would be a very wise action.

Do you have a question? click here for an answer
Question From Tracey
6/27/2012
I live with my Mother and she has a reverse mortgage. Can I put my name on the papers for me to stay after she passes?
Expert Answer

Hi Tracey,

You can always stay after your mom passes, your mom and then her heirs always own the home.  However, you just cannot stay on the same reverse mortgage loan.  A reverse mortgage borrower cannot just add others to the loan or title after the loan closes as the loan becomes due and payable when the last remaining borrower on the loan passes or permanently leaves the home.

When that time comes, you have the option of selling the home, paying off the mortgage if the home is still worth more than what is owed on it, or paying 95% of the current market value if the mortgage balance exceeds the home value and you can keep the home that way as well.  So you can make provisions to remain in the property and keep the home in the family after your mom passes, but you would have to either pay off the loan with funds available to you or refinance the loan at that time in your own name.

Do you have a question? click here for an answer
Question From Frank
3/17/2012
My mother need to enter a rehabilitation center for at least 6 - 12 months. How does this affect her reverse mortgage?
Expert Answer

Hi Paul,

The underlying guideline will be whether or not the borrower(s) is/are absent long enough to still consider the property the primary residence. If the borrowers want to take a 3 or 4 month vacation, no servicer I know would take issue with that time period. If the time frame was to be 2 years, I think it would be safe to say that the property was no longer their primary residence during that period and therefore under the HUD rules, they would have to call the loan Due and Payable.

Unfortunately, there is no set time period on the Deed of Trust for which the borrowers can be out of the home on a "vacation" basis so I cannot give you a definitive answer. What servicers are doing today as a matter of policy may not be the same as they do tomorrow and unless it is specifically spelled out in your loan documents, there is some room for HUD and the servicer to interpret and change policy. However, I can tell you this for sure: good communication with the servicer goes a long way.

If you have a reverse mortgage and you get the opportunity to travel for extended periods, notify your servicer and make sure they are aware of the circumstances. As long as they are sure that the home is still occupied as your primary residence and that the borrowers have not left the home, they can work with you to make certain there are no miscommunications. The troubles typically start when people think they need to hide something and when servicers can't get in touch with borrowers, that's when it really appears the home has been vacated for good and the servicer needs to take action.

Click here to download a helpful .pdf brochure written by our servicing company Celink in regards to occupancy requirements.

Do you have a question? click here for an answer
Question From Debbie
1/09/2012
Is it true that if an inheritor or owner of a reverse mortgage decides to sell the home, and asks less than the amount of the loan, that the reverse mortgage company holding the note cannot request more than the amount the seller asked?
Expert Answer

Thank you for your question. We've gone ahead and posted this in our "Ask the Expert Series" found here

Do you have a question? click here for an answer
Question From Marc
4/15/2011
I was left my grandmother’s home who passed away in Sept 2009. The 12 months has clearly passed and I am still residing in the home as I lived here to take care of her. I was served foreclosure papers in Oct 2010. Currently there is no record of the foreclosure in the court system. The balance my grandmother owes on the reverse mortgage statement is approx. $262K and the property was recently appraised by a real estate agent @ $140K based on the local sales comps. I have a 3rd party buyer who is in the process of putting in an offer on the house.Here is my Major dilemma... I have a pending lawsuit for my grandfather’s estate in which I am the Executor. He predeceased my grandmother in 2006. The way the Will is written is that anything in his estate is to be transferred to my grandmother’s estate. Currently her estate is insolvent; however there is approx. $40K in her credit card debt which the creditors have made claim against even knowing there is no money in her estate. My question is can the lender (it is a HUD government reverse mortgage) make a claim against my grandmothers estate for any of the outstanding balance of her loan after the short sale? I'm extremely concerned because any funds I'm awarded in the lawsuit could be wiped out in her probate estate if the lender puts in a claim for the deficiency. PLEASE HELP!!
Expert Answer

You have no need to worry. The reverse mortgage is a non-recourse loan and that means that the lender can only look to the property to repay the loan. The lender cannot go after your grandmother's estate or you as the heir for any shortfall after the sale of the property. You can rest easier knowing that there will be no further recovery actions on this loan. I wish you the best of luck.

Do you have a question? click here for an answer
1
Additional information on our site:

Additional Resources:


Heirs and Maturity
(34 votes, average: 4.94 out of 5)
How do you rate this article?
 

Hi, I'm ARLO. My job is to find you the very best reverse mortgage terms. I can fetch all kinds of stuff like real time rates and loan comparisons. Shall we get started?
Maybe Later