I have lived in the home with my mother and paid all of the property taxes and home insurance plus maintenance for the home and lived there for seventeens years can the reverse mortgage lender kick me out of the home?
I get this question or one very similar to it a lot and you’re looking at the loan in the wrong manner. The reverse mortgage is a loan just like any other loan. The reverse mortgage lender cannot do anything that the owner of the property does not agree to allow the lender to do when the loan is originated.
If you are on the loan with your mom, then you also have the right to stay in the home for as long as you wish. If the loan was only in mom’s name, and as the owner of the home she agreed as part of the terms of the mortgage that the loan would be due and payable when she no longer lived in the home.
She did not agree to allow the lender to determine who can and cannot live there. She did promise to the lender that when she moved out of the home (whether because she passed or moved to another location), that the lender could call the loan due and payable so the lender can request the funds if it is time that repayment is due but they cannot arbitrarily kick anyone out of a home.
If mom was the sole borrower on the loan and is no longer living in the property, the loan is now due and payable. If you are now the owner of the property, you can pay off the loan with funds available to you, by refinancing the debt with a new loan in your name and you too can stay in the home or you can sell the home and keep any funds for which the property sells that are above and beyond what mom owes on the loan.
If mom has passed and left the home to a different heir, that would be up to you and the other heir to determine how that would play out. But once mom is no longer living in the property, the loan would be due and payable.
If the loan is not paid back, that is a default in the loan terms and like any other default on any loan, the lender would ultimately have to begin foreclosure proceedings to protect its interest if you didn’t make arrangements to sell the home or pay the loan back.
I don’t know what arrangement you had with your mom on the payment of the taxes, insurance and maintenance. Those items were your mom’s responsibility under the reverse mortgage and had they not been paid, the lender would have had to accelerate the debt much sooner as that is also a default in the loan terms (just as non-payment of taxes and insurance is a default in forward loans as well).
My suggestion to you would be to contact a real estate professional and determine whether or not there is still equity in the home as that may determine your next move (assuming you are the heir and your mom has passed).
If there is equity in the home, you can decide if you want to try to obtain a loan in your name to refinance the debt and keep the property or sell the home to get the equity. If the existing loan exceeds the value of the house, you still have the right to keep the house and pay off the existing loan for the amount owed or 95% of the current market value, whichever is less.
If there is no equity and financing 95% of the current value is beyond your means, if you check the math, you may still be getting a better deal in the long run, I can’t say.
I don’t know what 17 years of property taxes, insurance and maintenance comes to, monetarily, but I would have to guess that it was far less than 17 years rent if you had to pay for another location so hopefully you will still come out better in the long run and that you had an opportunity to put some funds aside.
Any way you look at it, it is far better for borrowers and their family to make these plans before the time comes when the owners with reverse mortgages pass and their remaining families must make quick choices. I wish you the best whichever way you end up going.