NOVAD Reverse Mortgage Problems – Please Help!

August 25, 2021

ATTENTION: This website is NOT affiliated with Novad. To contact Novad servicing, call HUD’s FHA Resource Center at (877) 622-8525

My mother passed in Oct. of 2018 in a nursing home. Prior to her death as POA I surrendered the home by registered letter to Novad, a HUD management company, requesting a Deed in Lieu of Foreclosure. As of March 2020 they have not taken over the title to the home and the tax collector is trying to get “The Estate of…”to pay the taxes and the estate has no funds nor do I believe they owe anything based on a non-recourse loan. Novad has taken over maintenance of the home because I stopped paying for insurance, mowing, etc., but not transferred the title. I have forwarded by registered letter the tax bill to Novad and refused to pay. Can I just walk away and ignore the tax bill or any liens etc.?

The loan is non-recourse, and therefore, the lender can never look to any other assets for repayment of the loan. HUD has a process for accepting a property via a Deed in Lieu of Foreclosure. I don’t know what your letter said or offered to do or what other steps you took to complete a Deed in Lieu of Foreclosure, but I can tell you that a letter alone would not have allowed them to proceed with this process.

And if there are any other liens on the property, the lender or HUD cannot accept a Deed in Lieu of foreclosure at any rate. HUD and lenders are required to complete a full foreclosure if they lack the authority to transfer the title or if the title is encumbered by any clouds.

If there are any other liens on the property and a lender or HUD accepts a Deed in Lieu of Foreclosure, they “inherit” those other obligations, whereas if they foreclose on the loan, any other lien-holders have the opportunity to protect their lien position by paying the amounts owed to HUD to move into a first lien position.

If they do not (and they almost never do), then that lien is removed, and the Deed upon sale goes to the lender or to HUD minus the other liens. I don’t know what steps you took with the servicer to ensure the property was eligible for a Deed in Lieu of Foreclosure, but it seems you may not have verified this option before submitting your offer to “surrender”. Have you followed up with them to determine if this was even a viable alternative?

For the lender or servicer to even speak to someone who is not the borrower or authorized by the borrower to speak to them on their behalf, you would need to have taken title to the property or provided documentation to them that they have the borrower’s authorization to speak with you. Did you provide the lender with this documentation?

Concerning other obligations, remember that property charges are not lender charges. Therefore, even though the lender will never look to anyone else or any other assets other than the property for repayment, others may have different options for debts other than the reverse mortgage. I would suggest that you contact an attorney in the area to determine the rights and obligations of the estate versus other debtors.

Another thing you might want to ask your attorney is about the maintenance and any possible liability should anyone be injured on the property while it is still owned by the estate (any insurance the lender has placed on the property after you quit paying covers the dwelling only – it does not cover liability should someone be injured on the property or any contents in the home).

He may tell you that if the estate has/had no assets and since mom has already passed, there is no liability that anyone can seek payment from, but I honestly do not know, and as I said, I cannot advise you in legal matters anyway. NOVAD can only look to the home for repayment of the obligation, and that is the non-recourse nature of the reverse mortgage debt.

If there are other debts or possible liabilities about which you are concerned, you really need to seek the advice of an attorney.

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126 Comments on this Article

Jon H.
August 15th, 2024

Questions:

1. Hail damage has necessitated an insurance adjuster review on my 94-year-old mother's home roof and related damages. The insurance company listed my mother and NOVAD as payees on the check. How does my mother get an endorsement signature from NOVAD?

2. Can NOVAD stop her from cashing the insurance check (less depreciation and deductible) and using the funds for other purposes, such as moving to assisted living?

3. She expects to turn her home back over to NOVAD/HUD since the loan balance doesn't support selling it for as much as the loan balance will soon be (upside down, so to speak). If she decides to move to assisted living, we will file the appropriate form for the turn-back foreclosure process. Our understanding is that she and her four children owe nothing (Dad passed five years ago). Is she required to fix/repair/replace anything, including the roof, to turn the home back?
Reply to Jon
- Michael Branson
  August 18th, 2024
  
  Hello John,
  Regarding your first question, the check is made out to both parties whenever there is a loan on a property, not just when the loan is a reverse mortgage. The lender is listed as "also insured" to ensure that any insurance payments are used to repair damages to the home. To get NOVAD to endorse the check, they will need to see that the repairs on the property have been completed.
  As for your second question, NOVAD will not verify that all the funds from the check were used to complete the repairs - they only need to confirm that the repairs have been completed in a workmanlike manner. For example, if your mother receives a check from the insurance company that more than covers the actual repairs (perhaps because other personal items were included), NOVAD will not withhold any approval of the funds once the repairs are completed. However, if you're asking whether your mother can skip the repairs and use the funds for something else, like moving to assisted living, NOVAD would not approve the release of funds for that purpose. The reason lenders are listed as additional insured on the insurance policy is to prevent borrowers from walking away with insurance proceeds and leaving the lender with a damaged property.
  Regarding your third question, the reverse mortgage is a non-recourse loan, meaning that the only security the lender has for repayment is the property itself. They cannot seek repayment from your mother or her estate, even if the loan balance exceeds the property's value. As her children, you never signed anything agreeing to repay the loan, so you are not obligated to do so. As long as no one attempts to remove any part of the real property (e.g., built-in appliances), the lender and HUD cannot seek repayment for normal wear and tear repairs, including issues like a worn-out roof.
  Reply to Michael
Sheron J.
February 27th, 2024

My ex-husband passed away on January 21st, 2023. He named his son as the executor of his personal estate. The house is under a reverse mortgage with Novad. To date, the son has finally scattered his ashes as requested. However, the personal property remains on the premises. His son refuses to allow anyone to clean out the house and garage. He has not initiated probate proceedings and has abandoned his responsibilities. Given that we were married for 19 years and I have not remarried, the law recognizes me as his widow. My question is: Can I obtain permission from the lender to retrieve the personal property?
Reply to Sheron
- Michael Branson
  February 29th, 2024
  
  Hello Sheron,
  You should consult with an estate attorney. If affording one is an issue, consider searching online for free legal aid services in your area. The lender cannot grant you access to the property as they do not own it until after foreclosure, and by then, it is usually too late. Furthermore, they typically avoid getting involved in disputes between heirs. You might need a legal court order, but I am not in a position to advise on that. An estate attorney can inform you about your rights to the personal property as the spouse and guide you on the legal steps necessary to protect those rights. I strongly recommend reaching out to an attorney sooner rather than later. Once the foreclosure process begins, the lender may remove all personal property from the home in accordance with foreclosure laws, and you could lose your opportunity to claim your belongings if you delay until after the foreclosure date.
  Reply to Michael
Ashley
September 24th, 2023

Hello Arlo,

My mother passed away in OCTOBER of 2022 and had a reverse mortgage that she was not allowed to include my dad/her husband of 44 years in on. We received a letter saying we had a month to come up with the payoff in November. Then in December, we got a letter that Compulink was taking over for NOVAD. After that, nothing else until August 2023 (last month). That letter stated we had until September 16th to contact them with payoff or they would start foreclosure.

When mom passed, she left the title to my brother, sister, and me. Then, with a lawyer, we signed the title back over to our dad. So when this last letter came, I decided to buy the house from my dad since he "hasn't owned the home for more than a year," yet he has owned it for 38 years, so he isn't able to renew a reverse mortgage of his own on the house. Anyway, I was approved for a mortgage loan and we set a closing date of September 13th, but we were unable to close because Compulink hasn't responded to any of the emails we've sent, and it's been well over the "5 days" they state they will respond to emails by contacting us.

All we need to know is their expected PAYOFF AMOUNT and then we can close the sale and the title company can send them payment in full. You would think they'd jump at full payment, but they can't even respond to our emails! Honestly, this is the shadiest thing I've heard in a long time, and I feel this company and those alike just prey on the elderly so they can screw them and their families over just to line their pockets with thousands upon thousands of dollars! Sorry, rant over.

We need to know how to get an answer from them with the payoff amount needed so we can finalize the sale of the house, pay Compulink back in full, and never have to deal with their shady actions again! Any help with this issue would be greatly appreciated! Thank you for your time!
Reply to Ashley
- Michael Branson
  September 24th, 2023
  
  Hello Ashley,
  
  I am sorry you're having such a difficult time but I'm not sure I understand fully the entire progression of events, but let me explain as much as I can. Firstly, if mom was married to dad at the time she took out the reverse mortgage, even if he was not eligible for the loan at that time if he was also living in the home at the time and has continued to live in the home continuously since, he is eligible for a deferral of the due and payable clause of the loan when mom passed. But for dad to be eligible for the deferral, he did need to be on title to the property, so by mom granting title to the children instead of her spouse, that negated his ability to continue to live in the property under the terms of the reverse mortgage. He can't "renew" a reverse mortgage at this time because title has passed twice since that loan was originally closed. Conce when mom passed and the title was changed to her children and then from her children to her spouse. Had you contacted the lender when mom passed and requested the deferral before you changed the title, they would have verified his eligibility, and he could have remained in the home under the terms of the original mortgage. Unfortunately, though, after multiple title changes, that is no longer a possibility.
  
  Now, the only thing that Compulink needs is something from the court or other legal document that authorizes you to obtain information on behalf of your mom or her estate. This is the same roadblock many people run into when settling a loved one's estate with both forward and reverse mortgages. Lenders can be sued if they give private information (which includes information about this loan) to unauthorized third parties. If your mom never sent a letter to the lender to authorize them to give you information about her loan, they need something that will verify your right to get this information. Otherwise, they have no way of knowing if you are a person committing fraud, another family member involved in a dispute over heirship, or what, and the lender is not about to become embroiled in the dispute by releasing information they are not legally entitled to release without authorization.
  
  I know you are frustrated, and it is easy to blame the servicer or the lender. Still, this whole situation started with a change of title that was out of the lender's control. Now, you need to ensure you get them the documents they need to recognize your right to sign for the Demand for Payoff Request. They must have proper documentation that you are the authorized heir before they can even talk to you about the loan. Have you provided them with this information yet? Because if you have, every state that I am aware of has laws under which the lender must comply regarding the issuance of a Demand Request, or they are subject to penalties. If you have provided them with the information to show that you are the heir and therefore entitled to act on behalf of the original borrower to settle the loan, I would suggest you both call the servicers and send the documents again that gave you this authority (registered mail, return receipt requested) to inform them that their time is running pursuant to the laws in that state and your sale is pending. If they do not comply, you should seek legal counsel to determine what your legal rights are based on your state's laws.
  Reply to Michael
Susan
August 27th, 2023

Hello Arlo,

Mom had a reverse mortgage condominium serviced by NOVAD. She passed away on 7/25/2022. On 8/30/2022, NOVAD verbally accepted foreclosure, and we walked away. I am now billed for HOA late payments and demand for repayment. The condo has yet to be sold and has been vacant for one year. NOVAD said foreclosure is a process. My concern is how I know NOVAD has taken possession of the loan and my responsibility for any fees. Thank you.
Reply to Susan
- Michael Branson
  August 27th, 2023
  
  Hello Susan,
  I cannot give you legal advice and recommend contacting an attorney if you have any questions regarding creditors other than the reverse mortgage lender. I don't know what recourse the HOA may have (especially in the state where the property is located), so you need to speak with an attorney who can advise you on such matters. I am only aware of the rights of the HOA to place a lien on the property and ultimately foreclose on that lien, and I know they can do other things to collect from the owners. Those actions would not even affect you. I have heard of HOA's suing an owner's estate for delinquent fees, but I am unfamiliar with that process. Since you never took ownership of the home and the lender is foreclosing on the loan, the HOA would most likely need to do whatever is legally possible to recover delinquent fees from Mom's estate. I cannot advise you of that process. Correct me if I am wrong, but you never signed anything agreeing to pay those HOA fees, did you? You don't own the property; your mom did, and as soon as the foreclosure finalizes, the lender will. The real question here is who is liable for the dues, and will it make a difference if they were delinquent before mom passed, if they only became delinquent after she passed, or what? I honestly don't know the answers to those questions. Still, if you never owned the property and the lender indicated it would take it by foreclosure action, I cannot tell you what the law says about who would be responsible for the HOA dues under those circumstances.
  That's why I recommend that you contact a probate attorney. They can probably answer your questions in the first call, and one call may be inexpensive or even free for the initial consultation. If the estate has assets, then it is probably better to contact the attorney immediately. Either way, it can't hurt to know exactly what your rights and responsibilities are so that if the HOA is pressuring you and you have some obligation or are not liable for any of it, you will know.
  Reply to Michael
Peggy
August 20th, 2023

Hi Arlo,

I have been trying since 2019 to buy my parent's home from Novad. In 2019 it took 6 months for a response, then I went down the rabbit hole of paying this much. I said yes, yet they went up 4 times to the point in 18 months, I could not afford it. Its 2023 home is still empty and in need of many repairs. I would love to try and get this home back into the family. Does anyone have any advice? Lawyer? A # to whomever I could call?
Reply to Peggy
- Michael Branson
  August 20th, 2023
  
  Hello Peggy,
  You need first to determine what stage the property is in at this time. In other words, did Novad ever complete the foreclosure, or is the property still titled in your parent's name? Novad was notorious for dropping the ball on properties for one reason or another. There is a chance that the property has yet to go through a complete foreclosure action as of this date, and if that is the case, Novad cannot sell you what they do not own. If I were you, I would first go to a title company and find out who the legal owner is as of today's date and what current actions have been filed. If it is still in your parent's name, is there a pending foreclosure? You need to know these things because if the house is still in your parents' name, their estate still owns the property. You may need to complete a probate action through a court, but then you would own it. You would not need to "buy" it because you would be the legal owner if other heirs might need to be resolved through the court to determine that you should be the heir to inherit the home.
  Next, you need to show Novad that you are the legal owner and settle the reverse mortgage. As the legal heir, you have the right to pay off the balance owed, or 95% of the home's current value, as payment in full for the loan, whichever is less if the balance owed is more than the house is worth. When you have determined that your parents or their estate still owns the home and you can show Novad that you are the rightful heir, they must then work with you to provide the loan balance and the information to pay off the loan. If they do not, you can get an attorney involved at that point.
  If you find out from the title that your parents or their estate no longer owns the home, that it did change title as a result of foreclosure, then it would be a matter of who owned the property at this time as to who you would need to talk to about a possible purchase. The title company can tell you, according to legal records, who the legal owner of the property is at this time when you research to see if it is still in your parents' name. Then you decide to see how far you want to pursue a purchase. Novad is a servicer for HUD, and if HUD owns the property, it would be placed on the market for sale, and you can check the HUD website to see if the home is listed here: https://www.hudhomestore.gov/Home/Index.aspx. Your best odds are if the home still belongs to your parents or their estate because that means you aren't buying it. It already belongs to your family. Suppose it has already gone through a complete foreclosure process. In that case, it has changed title, and you are competing for a sale with every other buyer in the market.
  Reply to Michael
John S.
November 8th, 2022

Thank you for posting these inquiries, comments and answers. My reverse mortgage hit 98% HUD informs be that servicing will be sent to NOVAD.
My monthly documents show an available unused amount of money up to now. Will I still be able to obtain these funds even though the loan is at 98%? As a matter of information the house in CA is worth double the loan balance.
Reply to John
- Michael Branson
  November 14th, 2022
  
  Hello John,
  
  The 98% is based on the original appraised value or HUD lending limit at the time the loan closed and in most cases, is not 98% of the current value of the home. The line of credit shown available on your statement is still available to you, just from a different servicer now.
  Reply to Michael
Joe B.
October 20th, 2022

I was reading the page where you answered people's questions about their experiences with Novad. I've got one heck of a story with some questions if this is the correct email to tell it too? I'll try to keep it to the point but there's a lot going on.
Reply to Joe
- Michael Branson
  October 20th, 2022
  
  Hello Joe,
  
  We try to make sense of the whole process as much as we can, but we are not affiliated with NOVAD and we are not always able to determine what their issues or concerns are if there is something they are doing that isn't "by the book" based on some information they received or suspect that we do not have available to us.
  We can tell borrowers what the HUD rules are and what the procedures should be, but there can be a multitude of issues that could possibly come up that we can't possibly cover as contingencies, nor can we anticipate all the issues that NOVAD may run into as a company.
  NOVAD was did not have the best reputation for customer service before the pandemic hit in early 2020 but since then they have been abysmal in many ways. You add to that the fact that HUD announced that they were going to change servicing to CELINK within the past 6 months or so, and things have gotten crazy.
  
  You can send your information to me at this address, and we will do the best we can to try to make heads or tails of the situation, but there is no guarantee we will be able to tell you why they are taking any specific actions. We will post it to the NOVAD site in case others are experiencing the same frustrations in the hope that it will help others as well.
  Reply to Michael
Bonnie
October 6th, 2022

Mother has lived at a nursing facility for a year and the home is vacant. It was a reverse mortgage. The power, gas and water are turned off. When does novad step in?
Reply to Bonnie
- Michael Branson
  October 12th, 2022
  
  Hello Bonnie,
  
  If NOVAD is aware that the home is vacant and the borrower is no longer living in the property, they should have acted already but you have two things that may be happening. One, HUD has already announced that they are moving their servicing contract to Celink and NOVAD has protested the move, but it is not yet been finalized.
  You might look at failures like this and say that this is why NOVAD will no longer be servicing the HUD loans, or you might look at this and say that HUD's announcement before all approvals and plans were finalized has caused the uncertainty and poor performance of the servicing. Since the reports of the servicing issues have been known for a very long time, I believe that this may just be another example in the long list of NOVAD failures to act in a timely manner when needed.
  
  However, if NOVAD was unaware of the fact that the borrower was no longer living in the home, then they would not have acted to call the loan due and payable. Do you know when was the last time the borrower signed and returned a notice of occupancy? If she or anyone else did for her and the lender thought it came from her within the past year, there is a possibility that they still believe the property is owner occupied.
  I would suggest that you contact a senior real estate specialist in the area and determine if there is any equity left in the property. If there is, take immediate steps to sell the home so that the money can be used for any current or future needs the borrower, the family or the estate may have. If there is no equity to be retained with a sale, contact NOVAD and inform them that the home is vacant, that there are no utilities and that they may want to secure the property. They should act quickly to protect their security for the loan by securing the property and initiating foreclosure proceedings.
  Reply to Michael
Tzion A.
September 29th, 2022

Question,

My grandmother passed away in May of 2021. We got a letter that they would be giving us a few months to get things in order before they sell the house. It is now September of 2022 I want to know when would they start sending foreclosure (on average) documents and how long is this process? (on average)
Reply to Tzion
- Michael Branson
  October 4th, 2022
  
  Hello Tzion,
  
  It typically only takes a few months for a servicer to get the title reports, appraisal, and any other information they need to contact the heirs of the borrower and let them know what their options are then proceed accordingly. When your grandmother passed in May of 2021, they should have had all the information they needed by July or August to let you know what the outstanding balance on the loan was, what options you had to pay that balance off in full or 95% of that amount if the property was not worth the amount needed to pay the loan in full or allow you to notify them that you did not wish to keep the property. At that point, then they would begin the foreclosure process.
  
  But remember, in August of 2021 we were still in full Covid "mode", and most companies were not fully staffed in their offices and NOVAD/HUD were no exception. NOVAD has been notoriously slow since before the pandemic broke out and it has only made them slower. Add to that the fact that HUD announced that they have awarded the contract for their servicing to a new company but NOVAD has filed a protest and appealed the move (https://reversemortgagedaily.com/articles/current-hud-reverse-mortgage-servicer-files-protest-in-effort-to-keep-contract/) so now things seem to have come to an even slower pace at NOVAD at least based on what we hear from most people who contact us. The bottom line is that until this is resolved, I don't think anyone can tell you what a "normal" or "typical" foreclosure process is if it involves NOVAD at this time.
  Reply to Michael
Shane S.
August 31st, 2022

Hi Arlo,

I cannot seem to get Novad to provide title company a payoff have been trying since Aug 1 2022, we are trying to close on sale and still nothing, i have called the FHA number numerous times and title company has tried to escalate it now how cost an additional $3000 in interest, anyone have any ideas?
Reply to Shane
- Michael Branson
  August 31st, 2022
  
  Hello Shane,
  
  Firstly, have you provided anything to NOVAD to substantiate that you are authorized to obtain the payoff information? In other words, are you the borrower or someone who has been authorized by the borrower to receive this information from the lender? And if you are not the borrower but have been authorized, have you sent the copy of the authorization signed by the borrower to NOVAD?
  A lender will not forward any information about the loan to an unauthorized 3rd party without the borrower's written authorization, a valid Power of Attorney, or court authorization. If you are not the borrower and have not sent this to the lender, do so as soon as possible or they will continue to ignore your requests.
  If you are the borrower or someone authorized by the borrower and you have sent them a signed authorization to receive the information and they will not provide you with the payoff statement, I would contact an attorney and have them send a registered letter including the Beneficiary's Demand Request and the date that the Demand request was first sent.
  If you have proof that they received your signed Demand Request previously (registered mail receipt, overnight mail signed delivery receipt, etc.) and you are the borrower, I suggest you ask an attorney about your rights to make them cease your interest accrual as of the date they should have initially sent the Payoff Demand.
  I am not an attorney and so I cannot advise you, but I believe there are limits to the length of time a lender can continue to collect interest once you have requested a payoff demand. If you are not the borrower, I would suggest that you follow up with NOVAD immediately after they receive the written authorization or court verification of your status as the rightful owner of the property or heir requesting the payoff.
  As I stated, I would also have your attorney send the letter with your authorization documentation to ensure that you have everything included that you need should any future action against NOVAD be necessary.
  Reply to Michael
John K.
July 18th, 2022

Can I pay down some of the outstanding balance and can I get rid of the MIP Service Fee?
Reply to John
Lydia H.
July 6th, 2022

Hello Arlo,
Where do I start the process to file a Deed in lieu of Foreclosure?
Reply to Lydia
- Michael Branson
  July 12th, 2022
  
  Hello Lydia,
  
  That's a question that may have different answers depending on your status with the property/loan and where you are located. If you are the owner of the property and the loan is in your name, contact the lender and let them know that you must leave the home and that you want to sign a Deed in Lieu of Foreclosure to them and ask them for the process.
  If you are an heir, there may be other steps involved if you do not yet have the title in your name or have authorization to sign the title over to a third party for the owner of the property. In that case, I cannot advise you as the steps could be different depending on where the property is located, if you are the sole heir or if there are others, if a probate is required, etc.
  If you do not have title to the property, you may still be able to contact the lender and ask them what they would require to accept a Deed in Lieu of Foreclosure but they may consider this the same as giving you legal advice and be unwilling to advise you. It would not surprise me if they simply asked if you had title to the property and if not, advised you to consult with your own legal counsel but I cannot say for sure.
  Reply to Michael
Dianne
June 16th, 2022

The reverse mortgage company (NOVAD) sent a notice to make sure Mom has been living in the home. She signed it and mailed it within allotted time. She has not received her monthly check afterwards. They told her in 5 days' time they will let her know what happened to her check. What if they say they never got the signed paper saying she has been living on the property the whole time? She is losing sleep over this; can you help ARLO?
Reply to Dianne
- Michael Branson
  June 16th, 2022
  
  Hello Dianne,
  The terms of the loan give them 5 days and then they would owe your mom a late charge! NOVAD is notoriously slow but they should perform within the time allowed. If not, have mom send them a certified letter demanding funds with the required late fees.
  Reply to Michael
Erica S.
May 12th, 2022

I know someone who has been letting someone live at her home. This person has been lying about this second person living in her home for years. This person is in the reverse mortgage program where she can only have 1 person living in the home however, she actually has a few people living in the home. I wanted to know what type of consequences she will face if she continues to lie on her monthly report.
Reply to Erica
- Michael Branson
  May 17th, 2022
  
  Hello Erica,
  
  There is no consequence for having others live with you if you have a reverse mortgage. As long as you live in the home as your primary residence, you can have anyone else living with you that you desire.
  In fact, as long as the rentals are not transitory or short-term rentals (meaning less than 30 days at a time), you can even rent out other rooms in the home if you want for additional income as long as you still occupy the home as well.
  Reply to Michael
John
May 5th, 2022

Hi ARLO,

You mentioned in previous answer that other reverse mortgage servicers will assign (transfer) mortgage to HUD (NOVAD) once it hits "predetermined limit". Just curious, would you mind elaborate on what kind of situation will make servicer transfer the loan to HUD (NOVAD)? Is the loan balance go way too high or ?

Thanks,
John
Reply to John
- Michael Branson
  May 10th, 2022
  
  Hello John,
  
  If you go to the HUD website and read their manual, they state that when the loan reaches a threshold percentage (as established by HUD) of a maximum claim amount, a servicing lender can request assignment to HUD. https://www.hud.gov/sites/documents/HECM.UG.CH6.PDF That percentage is currently 98% and is based on 98% of the original value.
  
  When the loan is assigned to HUD, NOVAD was HUD's only servicer for many years but soon CELINK will also be servicing for HUD as they were recently approved and that is a good thing. The actual loan to current value with property appreciation might be 50% or less in many cases but the formula is based on the original figures.
  
  I am not involved in servicing and in all honesty, I am not completely aware of what circumstances would make some servicing lender want to keep the loan and not assign to HUD at 98% because the operative word her is "...may request assignment to HUD...".
  
  I honestly do not know if the decision to assign or not to assign affects a lender's ability to file for claims against the HUD insurance later but I have observed that most loans we see that exceed the 98% threshold have been assigned to HUD so the lenders do appear to choose the option to assign to HUD at this time and I could only speculate why this might be a better option for the lender so I won't go into that here.
  
  But since the percentage is based on the original numbers, as I stated earlier, we have had borrowers and heirs contact us (either for the purpose of getting a new loan or to request information on our blog) wherein the original HECM loan was now around 50% of the current market value of the home as well as those whose balance exceeded the current market value and everywhere in between that was assigned to HUD.
  
  Personally, I believe the decision to transfer the loan to HUD is based on the rules and procedures in place by HUD for loans that exceed the threshold, claims after that point and the lender's individual policies.
  
  I would be very surprised if any lenders had a loan-by-loan approach to loans that are transferred since no one knows what the real estate market will do in any given month and what might be a strong loan to value today or a below market loan to value may change next year.
  Reply to Michael
Suzanne W.
April 27th, 2022

We paid off our reverse mortgage to Novad (OKC), according to their directions emailed to us. We have proof of Fed Ex delivery 03/30/2022 but absolutely no communication or confirmation from them. And, there is no apparent method of communicating with them except for email (which isn't answered) or the telephone number of the HUD call center (who can provide absolutely no information). We emailed Novad a lien release request 04/19/2022, again no reply. Online reviews of Novad countrywide are dreadful. We're becoming concerned and wonder what we can do to make sure that this process is moving forward.
Reply to Suzanne
- Michael Branson
  April 27th, 2022
  
  Hello Suzanne,
  
  I would suggest that you first check the title records to see if they have filed a reconveyance on the loan.
  It is possible that they have done what they need to do and have sent the Beneficiary's Reconveyance Deed to the county recorder to be recorded and that generally takes the county a while to both record and send to you after that has been completed. I would not expect that you had that back in your possession in less than 3 weeks.
  However, if you pull the records and there has not been a Deed recorded to remove their lien, then I would recommend that you send them a letter to demand that it be completed immediately pursuant to federal laws which deal with the release of a lien once it has been paid in full.
  
  I believe you have recourse and can contact the Federal Trade Commission (FTC) on their website.
  
  There is also information available on the HUD website which indicates that you may want to contact the FHA resource as well if you determine that NOVAD has not yet processed the payoff funds.
  
  But I would tell you not to panic yet, it is very possible that the payoff is in full motion and you just haven't received the Reconveyance Deed back from the county recorder yet. It doesn't hurt to follow up though and not wait only to find out later that something happened to your payoff.
  Reply to Michael
  - Peter F.
    June 3rd, 2022
    
    Hi Arlo,
    
    I have the same problem as Suzanne. I paid off reverse with cashier's check to HUD on 04/26/2022. My bank confirmed it was cashed. Numerous emails requesting even acknowledgment of receipt of check have gone unanswered. Lien has not been released. Checked with public trustee and county recorder offices. They haven't received anything as of 06/01/2022. HUD and FHA keep saying they will escalate, but nothing happens. I did get a small refund from my payoff for the few days I paid early. Thanks for any insight you might have, Pete.
    Reply to Peter
    - Michael Branson
      June 10th, 2022
      
      Hello Pete,
      
      I am not an attorney and cannot advise you legally but you may want to seek legal advice. There are laws (possibly state and federal depending on where you live) that dictate how quickly a lender must perform certain functions after a loan has been paid in full and I am not fully aware of those deadlines. But there are also other considerations you should keep in mind.
      
      Remember that NOVAD was not your original lender. NOVAD is a contract servicer for HUD and so that loan was transferred to them and it could have been at more than one other lender prior to being transferred to HUD and therefore being serviced by NOVAD. With the fact that the loan was housed at one or more other lenders prior to going to NOVAD and just coming through a multi-year pandemic that left many companies short-handed, there is a possibility the loan records are missing or misplaced and they need to locate them.
      They may just be doing everything they can to locate them before they take whatever steps are required when documents are permanently lost - I can't say. If it was me, if I didn't need to do something immediately, I would put them on notice that you would take whatever legal steps are necessary if the lien was not removed soon and I would send that notice to both HUD and NOVAD with certified mail, return receipt requested and give them an opportunity to rectify the situation.
      
      If however you need that release now because you are trying to do something else and this is preventing you from accomplishing your plans (i.e. get a new loan, sell the property, etc.) then I would contact an attorney who specializes in this area of the law and find out what their legal requirements are and follow the advice of your counsel. He/she may advise you to make a demand for action within a certain time frame, request damages or who knows what but again, I can't advise you because I am not an attorney.
      Reply to Michael
Christian L.
April 21st, 2022

Hello Arlo,

My Mom originally executed a reverse mortgage on her home of 32 years in Chapel Hill, NC in 2005 (passed unexpectedly August 2021). I live in NJ. There was no will or trust so the property transfers to the heirs. The housing market there was and still is very favorable to sellers. It is difficult to manage an action within 30 days of death while dealing with the loss and putting the person to rest. Without really knowing the market valuation or the details of the reverse mortgage process, I contacted the servicer, Novad Consulting, who could only be reached via email. I notified Novad of the intent to conduct a Family Sale of the property which they acknowledged. That was late Sept 2021. I have maintained the property and taxes and the home is almost cleared out. As it turns out, the Deed of Trust was assigned to HUD in 2016. While housing is soaring, the value of her home has not significantly outperformed the mortgage amount - probably by design. So, my question is: if I already elected to sell but am unable to do so, can I contact Novad and change to a Deed in Lieu ? I think this would be beneficial to HUD vs standard legal foreclosure. I am currently in the middle of the first 3-month extension.
Reply to Christian
- Michael Branson
  April 21st, 2022
  
  Hello Christian,
  
  NOVAD is HUD's servicer and the loan would have had to be assigned to HUD for NOVAD to be the servicer on the loan so there is no surprise there. The value versus the amount owed is a function of value of the home for sure, but also which reverse mortgage your mom got, when she received her funds, interest rates, etc.
  It is not at all uncommon for people in the same town, with similarly valued homes to have totally different equity positions at the end of their reverse mortgages just based on how large a balance they began the loan with, whether they got a lower interest adjustable-rate loan or a full draw fixed rate loan, etc. And you have every option open to you still now as an heir even though you indicated that you intended to proceed one way at the start.
  
  For example, I tell everyone with whom I speak that as hard as it is to think about it, it is best to get to the home and clean out what you want from the home in the way of personal effects right away and then contact a senior real estate agent in the area. Most are affiliated with or at least know of estate sale professionals and after you have the sentimental items you wish to keep, they come in and get everything cataloged and set up for an estate sale within a week or two from the time you let them know you are done.
  At the completion of the sale, they give you a receipt of the left-over item that they donate which you can use for final taxes (talk to your tax preparer or accountant to see how this would work for you, it worked well for our situation because there were so many things that family members just could not use because they had their own full houses already).
  
  Now your home is ready for the real estate agent to list in weeks, not months. And this is important because interest is accruing for as long as the loan remains outstanding. Every dime of interest you accrue you cannot use for other expenses including end of life expenses.
  No one likes to consider selling their parent's home (especially when it is a place in which you grew up), but it doesn't get easier the longer you procrastinate and the more interest that accrues the worse it is for the estate/family. And if it turns out that the home will not sell for more than is owed on it, you always have the option at any time to walk away and owe nothing. But the sooner you make that determination, she sooner you quit paying for upkeep, taxes, insurance, utilities, etc.
  
  Yes, you can elect to give the lender a Deed in Lieu of Foreclosure but the lender must agree to accept it. And if there are any other liens or the property is not at least "broom clean" and free of all personal property, they will not accept it because if they do, they accept your liens and possibly other problems.
  So, I would encourage you to contact a local senior real estate agent in the area and let him/her tell you if the sale is worth the effort (after all, if there is any equity remaining, you should get it). If not, tell NOVAD that you wish to give them the Deed in Lieu and if they are not particularly excited about moving quickly to complete such an action, then you can decide what to do about the continuance of utilities, taxes, etc. and they may move a little quicker toward resolution.
  Reply to Michael
  - Cathy S.
    April 29th, 2022
    
    Hi Arlo,
    We recently attempted to complete a Deed in Lieu with Novad after my mom passed away.
    
    They initially did not respond to the documents and letters we mailed even after we sent what they require for communication. It took hours on hold to the call center even to be told that someone would contact us (within 5 more business days). Eventually we received an email contact.
    
    Each step in the process took a long time. It took a week any time there were questions to be answered. Costs for taxes and maintaining the property started to add up. They did take custodial care of the property during the process. But in the end, they wanted additional court documents that would result in added costs.
    
    The only quick response we received from them was to acknowledge that the estate was insolvent and we were no longer willing to peruse DIL.
    
    When dealing with Novad, our experience with an underwater reverse mortgage leads us to believe we should have walked away as soon as possible. That is certainly not ideal, but working with them is nearly impossible.
    Reply to Cathy
    - Michael Branson
      May 2nd, 2022
      
      Hello Cathy,
      
      The problem with a Deed in Lieu of Foreclosure is that the lender assumes any and all liability if there is anything else on the property so they are very slow to act with a Deed in Lieu.
      If the lender takes the property back through a foreclosure action, any other subordinate liens are removed with the foreclosure sale unless the creditor steps up to protect their lien position by paying off senior creditors and taking the property (which most of the time just doesn't happen). But if the reverse mortgage lender accepts a Deed in Lieu and then other liens are still on the property, they take the property liens and all.
      
      If you are not going to sell the property yourself or keep the home and pay the loan off, there really is no benefit to trying to do a Deed in Lieu of Foreclosure.
      The reverse mortgage is a non-recourse loan and no other assets can be affected by a foreclosure and since the borrower has already passed, there are no credit ramifications either (lenders do not even report to credit bureaus for deceased borrowers on reverse mortgages).
      Reply to Michael
      - Michael D.
        September 24th, 2022
        
        Hi Arlo - We have a situation almost exactly like Cathy's. My wife, who is in the beginning stages of Alzheimer's is the sole heir of her brother's estate. He took out a reverse mortgage about 10 years before he died. We have been trying to rid ourselves of this property for over 6 months now. Trying to deal with Novad is a nightmare. They have told us that we must pay them $800 plus dollars in taxes which they say HUD has paid and send to Novad a release from. We have a bill for the insurance that is currently due. I don't want to pay any more money to them or anyone else on the property. Can we just ignore them and let them take the house back since My wife never had a mortgage or anything to do with this property?
        Reply to Michael
      - Michael Branson
        September 30th, 2022
        
        Hello Michael,
        I cannot give you legal advice. I can tell you that the reverse mortgage is a non-recourse loan. That means that the lender and HUD have no recourse other than the property for repayment of the loan. Non-payment of taxes and insurance is a default under the terms of the loan for which the lender or HUD can call the loan due and payable and if the loan is not repaid, they can foreclose on the Mortgage or Deed of Trust. If you choose not to pay anything to NOVAD, they will be forced to initiate foreclosure proceedings against their borrower, your wife's brother, or his estate. Since the loan is a non-recourse loan, they cannot go after his estate or any heirs for any additional funds other than what they receive from the property. They will take the property in the foreclosure action and sell it if it is not bought by a higher bid at the foreclosure auction to pay any past due amounts. But since you and your wife are not on that loan and never agreed to pay anything, it does not affect your credit in any way. If you have any personal property of her brother's still in the home you wish to keep, you should remove it from the home as soon as possible because once you make it known that you do not intend to keep or maintain the home and that the home is vacant, the lender does have the right to secure the property to protect their security.
        Reply to Michael
Henry A Lizano
April 15th, 2022

My Mother-in-law who is in her mid 80's received a foreclosure letter from Novad because she is a non-borrowing spouse. I was told that a non-borrowing spouse can still leave in the home.

Novad says they need a copy of her driver's license, Social Security card, copy of the marriage license,
Proof of Insurance and Taxes being paid. A death certificate for my father-in-law. Plus, they want $1500 dollars for what they say are unpaid taxes? She paid the taxes. Is this a scam letter
Reply to Henry
- Michael Branson
  April 15th, 2022
  
  NOVAD is the servicer for HUD. This property could be owned by HUD if they completed a foreclosure on a reverse mortgage, but if not, the "owner" with the ultimate responsibility would be the original borrower if still living, their estate if they have passed or their heirs if they have transferred the title to another individual.
  I can't tell you which nor could I tell you why NOVAD has not completed a foreclosure to date if the original owners had left the home which is grounds for calling the loan due and payable under the terms of a reverse mortgage if they are not proceeding to foreclose and they are aware of the vacancy by the original borrower.
  
  I am not an attorney and cannot give you legal advice so you may wish to contact an attorney in the area to see what actions are open to you. They may include talking to a city manager if the property is truly a nuisance to see if there are codes that are being violated. If the city posts violations, the lender will almost certainly act at that point, especially if the violations are severe enough.
  Reply to Michael
AC
April 6th, 2022

There is an issue with house in our neighborhood that has become a squatter house and a nuisance. That supposedly is under a reverse mgt and this mgt company. Going on 2 years and nothing is being done about this property and our complaints seem to be falling on deaf ears. Who is responsible for securing the property and cleaning it up? What can be done about getting them to do so asap? Police say there is nothing they can do about it - it's the owners responsibility?
Reply to AC
Stephanie
March 29th, 2022

Hello Arlo,

My Great Grandma had a reverse mortgage HECM taken out in 2009, she was the only borrower. She died 5 years ago 2017. Novad Management Consulting mailed the condolence letter and loan options. The heirs opted to do nothing since they wanted way more than the value of the property. The letter said foreclosure in 6 months if nothing was done. The foreclosure hasn't occurred, the title is still in her name, the balance of loan is still accruing and the taxes are overdue. Should it take that long for the foreclose? What will happen to the property if the foreclosure doesn't happen? Fast forward 5 years later I'm interested in purchasing the property but not as an heir. Since the foreclosure hasn't occurred who owns the property? If the property belongs to HUD will they negotiate a purchase price? I have tried calling Novad and HUD but not having any luck talking to someone or getting a return call. What should be next step in getting answers?
Reply to Stephanie
- Michael Branson
  March 29th, 2022
  
  Hello Stephanie,
  
  If HUD doesn't own the property yet, they can't sell it to you. Your great grandmother or her estate still owns the home at this time if the lender has done nothing to foreclose and take title to the home. You have a few different options. You can wait until the house does go through foreclosure and then make an offer on the property and HUD will sell the home as an REO property (Real Estate Owned) and they will evaluate your offer with any others they receive and choose to accept or decline the offer.
  REO properties typically sell for 90 - 95% of current market value (except hot markets where they can demand full price) and they are always "as is" with no warranties or repairs available by the seller. Once HUD does own the home, they usually list the property with various approved entities in different markets but they do try to sell them as quickly as possible (or as quickly as possible for a huge government entity which doesn't typically move all that fast).
  
  Or you might try talking to the family to see if they will allow the title to pass to you now and then you can contact HUD to request payoff of the loan at 95% of the current market value pursuant to their rules for heirs who wish to keep the home. I don't know if you are beyond that capability now due to the amount of time that has passed but it can't hurt and if HUD continues with the foreclosure, it goes against your great grandmother, not you even if you held current title.
  It might not be a bad idea to check with a title company first though to see what other liens may be on the property as those liens would remain on the property in such a transaction. You would need to do your calculations to determine if any current loans/liens would make it worth your while to just take over the property even if you could pay off the existing reverse mortgage at 95% of the current market value.
  If there are other obligations that would only be removed with a foreclosure action, it might be better to wait and try to buy the home after HUD forecloses. I would also recommend that you speak to a real estate attorney to determine what your rights and obligations would be so that you enter the process knowing all the facts.
  Reply to Michael
John
March 7th, 2022

Hello ARLO,

I am working on a HECM short sale. The loan was previously owned by Finance of America Reverse LLC. Their servicer is Celink. However, FAR transferred the loan to HUD (NOVAD).

Since loan was transferred from Celink to NOVAD, my previous short sale paperwork with Celink was no longer valid and I need to work with NOVAD now. As you may know, Celink is very slow while NOVAD is even worse. I cannot even get their short sale instructions as well as their closing instructions from NOVAD.

So ARLO, do you have full HECM short sale instructions from NOVAD?

Thanks,
John
Reply to John
- Michael Branson
  March 9th, 2022
  
  Hello John,
  
  No, unfortunately, that loan has been assigned to HUD and NOVAD is their servicer. Only NOVAD can tell you what you need to know and if the loan was recently transferred, they may not even have it set up in their system yet.
  I wish I could advise you of a quick settlement option but there is no such thing. I can only suggest that you continue to contact them on all avenues they have available. Send them faxes, send mail registered with return receipt requested and keep on them.
  
  NOVAD was not known for their speed before the pandemic but they have been extremely backed up ever since it started and you just need to keep trying.
  Reply to Michael
Lauren
March 2nd, 2022

My father recently passed away and I am trying to send a letter of intent to sell the house and repay the loan balance. What address should I send this to?
Reply to Lauren
- Michael Branson
  March 2nd, 2022
  
  Hello Lauren,
  
  You should check to see if your father has any statements at his house and use the address provided on the statement. NOVAD publishes their contact information on the web in a number of places but you can also find the information on the HUD website here:
  
  https://www.hud.gov/program_offices/housing/sfh/nsc/fmaddr
  
  There are also email addresses listed on the page for payoff information and for servicing inquiries. I would suggest you use all contact information available to you and be sure to send whatever documentation you have that verifies that you are authorized to act on behalf of the borrower or the estate (Power of Attorney, trust, wills, court documents, etc.).
  There could be unnecessary delays if the servicer cannot determine that you are the rightful heir or the current owner and they will not release information to an unauthorized party. Be sure to send written correspondence with return receipt requested to document that they received your information and keep fax transmittals and emails.
  Reply to Michael
Kim M.
February 28th, 2022

I am a Realtor and listed a home that has a reverse mortgage with Novad. The home was seriously over appraised years ago, and the now deceased owner spent every penny of this number. Even in todays market it will never sell for that crazy high price! Now I have 5 legitimate offers to buy the home, but none will ever be high enough to cover the mortgage. The attorney for the estate has tried to reach the company, he was put on hold for hours.

Now, it is my turn. Any ideas of what I can do to try and close this sale. A vacant house is a dangerous thing, especially in the winter in the northeast! Thank you.
Reply to Kim
- Michael Branson
  March 2nd, 2022
  
  Hello Kim,
  
  I'm not sure I can help you very much. If you are contacting the servicer and the estate still owns the home, have the heirs supplied the proper notice and information to the servicer yet to establish that they have the legal right to contact them on behalf of the owners and have you gotten a signed authorization from the heirs to release any information you, a third party?
  If the lender or servicer has no signed authorization that supports the fact that you or the attorney actually represents the borrower or the estate/heirs, they really can't give you any information and that may be what they are missing.
  I would suggest that you start by sending the legal paperwork that authorizes both you and the attorney to work with the lender on behalf of the borrower or their estate/heirs and send it several ways, fax, registered mail with return receipt requested and via overnight delivery with signature required.
  At least this way you can document that you have them on notice of your legal right to represent the deceased owners or their heirs/estate and can begin to apply some pressure on them to acknowledge and reply.
  Reply to Michael
Mike M.
February 1st, 2022

I have a friend that has a reverse mortgage with Novad. She is now 71, in very poor health and has a lot of pain due to a bad back and no longer able to work She gets about $950.00 per month from social security and about $130.00 in food stamps and she is on Medicaid. She still has about $250,000 equity in her home, but selling and moving would mentally and physically kill her. Do you have any kind of program that you would pay for her taxes and home insurance until her passing, in return you would inherit her home? She has no one to leave it to...
Reply to Mike
- Michael Branson
  February 2nd, 2022
  
  Hello Mike,
  
  I am not aware of such a program and the reverse mortgage does not allow her to defer taxes or insurance. I know moving may not be an ideal situation for her, but she should sit down with a trusted financial advisor and/or family or friends she can trust and consider all aspects of staying versus moving.
  She needs to remember that if she sells the home, the cash she would receive from the sale would probably be enough to stop her eligibility for Medicaid as that is a needs-based program and if she suddenly had cash in the bank, she probably would no longer qualify for the program.
  
  I think you are right to look into programs that may assist her with her tax and insurance expenses but unfortunately, I am not aware of any to whom I can refer you. Perhaps if she belongs to a particular church, they may be willing to work with her knowing they would inherit the home at her passing (they also need to know though that the loan would be due and payable at that time and they would have a limited amount of time to pay off the loan and then they could do whatever they wanted with the house).
  
  If she is delinquent now, there are programs that are designed to help borrowers and you can certainly try under the Homeowner Assistance Fund (HAF) that is described on the National Reverse Mortgage Lenders Association website here.
  
  I hope this helps!
  Reply to Michael
- John H
  February 26th, 2022
  
  Novad is a terrible company to deal with. Tell your friend to find another option. They are very hard to deal with and do not do what they say they are going to do. My mother has went through them and have been nothing but a pain in our neck to deal with. I strongly suggest you go else where. They are not an honest company and do not care about the needs of the elderly.
  Reply to John
Patty
February 1st, 2022

Hi Arlo,
My grandfather is 88 and has a reverse mortgage with NOVAD. He needs my assistance with all of his financial decisions and bill paying, along with everything else. I have a POA and want to purchase my grandfather's house. Please tell me the steps I need to take with Novad, to successfully and quickly purchase the house?
Reply to Patty
- Michael Branson
  February 2nd, 2022
  
  Hello Patty,
  
  NOVAD does not control your purchase of the property. They are the servicer for HUD and are only servicing the loan on the home. You do need to follow all laws that pertain to the use of a POA though and most will not allow you to use the POA for a self-serving act and therefore you should probably speak to an attorney to be sure to follow all needed requirements to make the sale legitimate.
  Then you can just complete the process to move forward with the sale from your grandfather to yourself and just know that when that when that happens, the reverse mortgage loan must be paid in full. Just as with any other sale, it is best if you utilize a title company or closing agent in your area so that you have an insured transaction and they will send a Demand Request to NOVAD injunction with the closing from which they will pay off the loan at closing.
  Reply to Michael
Michael Branson
November 30th, 2021

Hi ARLO,

My mother, the owner of a condominium subject to a reverse mortgage. The condo is significantly "under water". I have tried numerous times--phone (hour ling waits), email and "snail mail- to contact NOVAD seeking either deed in lieu or short sale authority. Total silence. What can be done? Whom to contact? Thank you
Reply to Michael
- Michael Branson
  November 30th, 2021
  
  Good Afternoon,
  
  First question I always ask: Has mom already written a letter of authorization which gives you permission to speak to the lender and the lender permission to speak to you about all things related to the loan? If not, the lender cannot even talk to you about a loan for someone else, even if it is your mom (which they do not know and even if they did know you were her child, without the letter, do not know if you have her permission to seek information about her loan unless she has signed a letter stating so).
  So many people think they are helping their parent(s) without a signed letter of authorization but financial privacy laws state that lenders cannot speak to any unauthorized third party about someone's loan. Without the signed authorization, they do not know if the borrower wants them to divulge their private financial information and they do not want to be sued for violating the law.
  
  I would suggest that you have mom sign a letter of authorization and have mom send it to them from her return address via registered mail. I cannot promise you that will resolve all your problems because I know that there are still many governments and government related entities that are still having a difficult time with Covid restrictions but that is a good start.
  After you are sure that they have received the authorization (based on your receiving the signed return receipt for the authorization), then you can at least start from a position of an authorized individual. If mom has already sent such an authorization, then I would send the registered letter but with a different letter - one that outlines your mom's needs, her position now and the date upon which mom will be leaving the property.
  That you wish to try to Deed the home to them prior to that event but if not, they need to contact you to discuss how they wish to proceed, but in any event, the home will be vacant on that date. A word of caution though, once you notify them of such an event, they can move to secure the property to protect themselves which means they can go in and change locks, etc. and I have had a family member tell me that NOVAD did tell him that they were going to do just that.
  Make sure you are ready in case they move quickly to protect their security after you inform them that the home will be empty because if you do not have all personal belongings out or mom is still living in the home at the time, it could be very stressful as the gentleman who contacted me soon found out.
  Reply to Michael
Ruth M.
November 17th, 2021

Hello ARLO,

My mother has a reverse mortgage that has been handed off to MetLife, then Nationstar/Champion then Novad, which is the current holder. I need to get a monthly statement from them. Mother is having a hard time remembering where all her paperwork is. She's 90. I get put on hold when I call. How can I get a monthly statement from the current reverse mortgage company? I don't have a computer. Thanks for any help you can give me.
Reply to Ruth
- Michael Branson
  November 17th, 2021
  
  Hello Ruth,
  
  MetLife was at one time the largest reverse mortgage originator in the industry. When they exited the reverse mortgage industry due to changes to the regulations, they sold all of their servicing to Nationstar/Champion who held it and serviced it until it met the contractual limit to where it had to be assigned to HUD.
  NOVAD is HUD's servicer so when it met that limit, the loan was assigned to HUD and NOVAD began to service the loan but it would have been assigned to NOVAD even if Met Life had never left.
  
  NOVAD has never been the easiest company with whom to deal with but since the Covid 19 pandemic, they are very difficult to contact and work with. And unless your mom has already written a letter authorizing the lender to speak to you about all matters related to the loan, they cannot talk to you due to financial privacy laws anyway.
  I would suggest that you have mom write a letter authorizing you to talk to them and them to you on all matters relating to the loan, send it registered mail with return receipt requested and then contact them after you have the receipt to show that they have the letter.
  Reply to Michael
- Policarpo C.
  December 22nd, 2021
  
  I received a "welcome letter" from NOVAD Management Consulting LLC, stating I need to forward a copy of the insurance on my home and a copy of paid property taxes for 2022. I am confused as I have maintained the property in good condition and do not have a liens on my home.
  Please let me know if I must comply with the above requests.
  Reply to Policarpo
  - Michael Branson
    December 29th, 2021
    
    Good Afternoon,
    
    When you say you have no liens, this is most likely from your reverse mortgage being assigned to HUD and NOVAD is now taking over the servicing as a result of that assignment. If you did have a reverse mortgage, then you should have received a letter from the former servicer as well telling you that they were transferring your loan to NOVAD.
    There are provisions in the loan that when certain conditions exist, the loan is assigned to HUD for the remainder of the loan term. Since NOVAD is HUD's servicing agent, they will need the most recent information from you which includes tax and insurance information. I have not seen the letter they send out and if the letter you received is the result of a loan you had that was transferred to them by another lender and they did not explain this in their letter to you, they missed an opportunity to put your mind at ease by being clear and explaining the full process at that time.
    
    If you do not have a reverse mortgage, then I would contact NOVAD and ask them why they believe you should send them anything as you have no loans on your home. At that point they can send you the Note - Deed of Trust/Mortgage and other pertinent loan documents which they believe obligates you to give them the information they are requesting.
    I would have to believe that although you say you have no liens on the home, you do have a reverse mortgage (and keep in mind that a mortgage, reverse or forward, is a lien) and this is now being serviced by NOVAD. But you are certainly within your rights to request them to send you verification of the loan if you do not believe you currently have a loan on your property or that NOVAD is the current lien/mortgage holder.
    Reply to Michael
Kam
November 12th, 2021

Hello ARLO,

My father passed away a year and a half ago. I was his POA. I've called HUD to find out what's going on with the reverse mortgage and they kind of mumbled about NOVAD. I called NOVAD and they say they can't give me any info. Right now, we're stuck in probate so that's a mess. But according to DC law, his kids are legal heirs. I also saw that they turned over the property while he was still alive which means my POA was still intact. But they did not reach out or get my consent on any of this. I'm afraid they will try to foreclose on the home before it gets through probate. What can I do?
Reply to Kam
- Michael Branson
  November 17th, 2021
  
  Hello Kam,
  
  I cannot give you legal advice and it sounds like you are at a point where that is exactly what you may need.
  I can tell you who the players are and what the loan does but you already have that information - you need to determine what legal steps will be required for your circumstances if you plan to keep the home and a real estate attorney would be the only one who can give you legal advice regarding how to protect your rights while you wade through the probate and other "swamps" required (which sounds like your plan at this point). I cannot confirm or deny your statement about the legal status of heirs under DC law - for that you need the counsel of an attorney who practices there.
  
  I can tell you that NOVAD probably has a servicing clerk who is not completely knowledgeable about the laws concerning the status of heirs in every state but they do know that they cannot give personal information about the loan to anyone who is not authorized to receive it and that's all they are willing to articulate.
  I believe that if you have counsel that can send them verifiable information that shows that you are considered the legal heirs now and do not have to wait for any further steps at this point for your status as the legal heirs to be recognized by the courts that you would be able to get more cooperation from NOVAD. Otherwise, your attorney will need to let you know what steps you can take to halt any foreclosure proceedings until you have a chance to complete the probate of the home.
  My suggestion to you is to use this time to determine what you intend to do with the home so that you are not just starting to consider options when that time comes.
  Reply to Michael
Roberta H.
November 1st, 2021

Hi there, My mother just past away and Novad service her home. I'm the Executor of the estate and now I need to see the home. It does have equity. I contact NOVAD and just making sure what the first steps are.

*Submitting a letter of Intent
*Copy of Trust
*Death Certificate

Also do I need to know anything about the taxes on the home, other than the yearly tax.
How will escrow know the payoff?
Reply to Roberta
- Michael Branson
  November 7th, 2021
  
  Hello Roberta,
  
  Let's start with your last questions. Escrow will know all the tax information directly from the assessor's office. They will automatically charge your mom's estate for her portion of the year and the new buyer for the portion of the tax year that they will own the home and charge one of you and credit the other as is needed. Escrow will obtain the payoff from NOVAD and if you have not done so already, be sure that you provide NOVAD with the information required so that they will honor your signature on the Demand Request escrow documents.
  
  The letter of intent is what the lender will need and if you already have the title resolved so that you can act for the estate due to being the successor trustee/beneficiary, then you are ahead of the game. Most people are still trying to figure out how they will change the title from the deceased borrower's name to the heir so that they even have the right to sell the home and if you already had the property in a trust and that trust has transferred to you and you can act on behalf of the trust, you are ahead of most people in your position. If the house is not listed, you should look into it as soon as possible if you intend to sell because it is still accruing interest and the sooner it sells the less interest you pay.
  Reply to Michael
Patrick
October 31st, 2021

My Dad has a reverse mortgage on his house and he is not sure what insurance he is required to keep. It is serviced by Novad. Can you tell us what all is required to keep the loan from being foreclosed on?
Reply to Patrick
- Michael Branson
  November 7th, 2021
  
  Hello Patrick,
  
  Your father should check with the servicer if he is not sure what insurance he needs. I cannot tell you what coverages he may already have or need but I can help you know what to look for. Dad will need hazard insurance that covers his home and if he is part of a multiple unit property (condominium, etc.), that insurance may be provided by a homeowner's association (HOA) but if that is the case, it would most likely only cover the structure itself. You need to be sure dad has sufficient coverage to also cover any contents in this case and may require what is termed a "walls in" policy because even though the HOA covers the structure, this policy would cover everything from the walls in, including his contents. If his home is a detached, single family residence, there would not be a separate policy for walls in vs the structure but there may be other coverages needed based on the location and other possible hazards present.
  
  You need to find out if dad is in a special hazards area. There may be other considerations that you should keep in mind even if he is not in a condominium but is in a single family residence. For instance, is dad in a flood zone? If so, he will need flood insurance. Is he in a wind hazard area? You may want to look into other coverages I cannot foresee.
  
  And finally, this is not specifically related to the insurance but I would suggest that you have dad write a letter to NOVAD authorizing you to speak to them and them to speak to you on all matters regarding the loan. If you are going to be helping him, they will need his authorization to speak with you about anything regarding the loan and now is a good time to take care of this detail.
  Reply to Michael
Joanne S.
October 12th, 2021

I have been notified by Champion Mortgage that Novad will be servicing my reverse mortgage. They have not given any other information. I respectfully request that a representative at Novad contact me. I have called and cannot get a person to speak with me. Been placed on hold for at least 45 minutes. I am 77 years and have been widowed for 20 years. I don't know what to do and need advice as to how this works with Novad.

Respectfully,
Joanne
Reply to Joanne
- Michael Branson
  October 17th, 2021
  
  Hello Joanne,
  
  NOVAD is the servicer for HUD. If Champion notified you that NOVAD will be servicing your loan, it means you have hit the predetermined level at which lenders must assign the loan to HUD and then NOVAD receives it to service. NOVAD has never been known for their phenomenal service but now with Covid, they are extremely behind and difficult to reach at times. Their information is posted on the internet under their own name and on HUD's site as well. Their phone number is 800-225-5342, Their fax number is 800-609-9826 and they have email as well. The information posted on HUD's site is listed below. I hope you are able to resolve your questions sooner rather than later.
  
  SECRETARY-HELD (HECM ONLY) MORTGAGE SERVICING CONTRACTOR
  NOVAD Management Consulting (NOVAD) is responsible for servicing the Assigned Secretary-held Home Equity Conversion Mortgages (HECM) and HECM Subordinate Mortgages.
  All required documentation, correspondence, telephone calls and servicing for the HECM Single Family Secretary-held Mortgages must be directed to NOVAD as follows:
  NOVAD Management Consulting
  Attention: HECM Servicing
  2401 NW 23rd St., Ste. 1A1
  Oklahoma City, OK 73107
  Phone: 1-800-225-5342
  Fax: 1-800-609-9826
  Contact by email:
  HECM Servicer Inquiries: hecmservicing@novadconsulting.com
  HECM Payoff Requests: hecm.payoffs@novadconsulting.com
  Hours of Operation: Monday-Friday
  7:00 A.M. - 7:00 P.M. Central Time
  Reply to Michael
  - Tonya S.
    October 20th, 2021
    
    I am going to 86 next month. My husband died December 31,2020 and I remarried and my husband and I bought a home in Florida. My home in Texas is up for sale but NOVAD says I am not living there and they will take it back. I cannot afford to live there and need a little time to sell it. I don't know what to do.
    Reply to Tonya
    - Michael Branson
      October 27th, 2021
      
      Hello Tonya,
      
      The loan becomes due and payable when the last borrower permanently leaves the home and no longer lives in the home as their primary residence or if you were married to him when he obtained the loan, you had the same protections. If you were on the loan with your husband that passed, the loan did not become due when he passed so the December date is immaterial, but it did become due when you left the home (moved).
      You did not mention when you left the home but if you had remained in the home until it sold, the loan would not be called due and payable. You mentioned that you could not afford to live in the home, but I must be missing something because I can't see how moving to another state and owning two homes at this time can be any less expensive than owning just one until you have made arrangements to sell it?
      
      If you have equity in the home and you want to protect that equity, you need to concentrate your efforts on selling the home before the foreclosure date or find a way to refinance the debt even if it means a short-term loan until you can sell the property. If you have no equity in the property (in other words if the loan amount is higher than the value of the home), you can let the lender take the home if you so choose and they cannot seek repayment from other assets.
      The reverse mortgage is a non-recourse debt which means the only thing the lender can look to for repayment is the property. If there is not enough equity to repay the obligation and there is a deficit on your loan, you would not be eligible for another reverse mortgage until that loss had been repaid but if you never intend to get another reverse mortgage, that is a moot point.
      I would urge all reverse mortgage borrowers to make their plans to finalize their current homes before moving on to the next property if they do not have the wherewithal to pay the loan off if the lender calls the loan due and payable while they are not living in the property as that is a default under the terms of the loan.
      Reply to Michael
Daniel
October 11th, 2021

Does NOVAD charge any additional fees besides the amount owed in the loan to "break" the reverse mortgage? If so, are they HIGH?

Also, are they notoriously difficult to get in touch with?
Reply to Daniel
- Michael Branson
  October 17th, 2021
  
  Hello Daniel,
  
  I do know that ever since the whole Covid breakout occurred, NOVAD has had reports of being difficult to reach and work with. I don't know if they have people working at home or what but you are not the first to question this. There are no prepayment penalties with reverse mortgages. Any fees to close the loan should be right in line with normal reconveyance, recording and other costs associated with paying a loan off.
  Reply to Michael
JOANN H.
September 9th, 2021

Hello Arlo, my uncle currently has a reverse mortgage thru NOVAD and no other individuals are listed on deed of house and his spouse has passed away. I live here with him- if he passes away, and the loan becomes payable what are the steps the lender takes? He does have a son but is not listed as an heir as there is no will to me knowledge. Also, how long before I would be asked to vacate the property. Thank You!
Reply to JOANN
- Michael Branson
  September 9th, 2021
  
  Hello Joann,
  
  It is so hard to say exactly. The loan becomes due and payable when the last borrower on the loan permanently leaves the residence. So, when the lender becomes aware that the last borrower has passed, they will contact the borrower's heir(s) and ask them to write a letter of intent to let the lender know what they intend to do with the property. Are they going to sell it, refinance it and pay the loan off or what?
  NOVOD needs this information to know what they will do to work with the family. The fastest they can do anything is to obtain an appraisal and call the loan due and payable which means with a foreclosure action, they could not force an eviction for 6 months or more from the time they became aware of your uncle's passing but when you say your uncle's son is not "listed" as an heir, what do you mean by that? Are you saying there is no will or that his father has specifically left instructions that he is not to receive the property?
  I am not an attorney and only an estate attorney may be able to answer your questions, but it is entirely possible that your uncles son would have full rights as an heir and he may have the option to remove you from the property much more quickly and that I cannot say. That would not be a matter of the loan but of rights of heirs and property owners.
  Reply to Michael
Harry D.
August 15th, 2021

My wife died June 15th of this year. what information and documents do I need to get to NOVAD?
Reply to Harry
- Michael Branson
  August 15th, 2021
  
  Hello Harry,
  
  If you are both on the loan, then you do not need to get them anything currently. You are still in compliance with the original terms of the loan and if at least one borrower from the original loan is still living in the home as their primary residence, you continue to pay the property charges (taxes, insurance, any HOA dues, etc.) on time, you will remain in compliance with those terms.
  If you were not on the original loan and you were a spouse at the time the loan closed and have always lived in the home, then you need to contact the lender and request the eligible deferral under HUD's terms for eligible spouses. NOVAD will let you know what they need when you contact them. But again, I stress, if you are also on the loan and are living in the home, you do not need to notify them at this time.
  Reply to Michael
Patricia D.
July 10th, 2021

Hello ARLO,

My father built this home in 2005 and obtained a reverse mortgage in 2010. The home was valued at $450k and a loan of $290k was issued. With interest, the payback now is almost $600k. The problem is the agent pushed the loan thru, knowing that the home was never approved for electricity. This means the home would not have valued at $450k in 2010. My sister and I have just become aware of this. I moved in with dad to care for him (dementia and lymphoma) sept 2020. Now dad is dying. Dad doesn't have a will, just my sister and me. My sister did obtain POA last year. I have begun conservatorship thru a lawyer but I don't think my Dad has 48 hours left of his life. What can I do about this reverse mortgage? The original lender sold it to Novad, I believe early 2011. Thank you for any help.
Reply to Patricia
- Michael Branson
  July 10th, 2021
  
  Hello Patricia,
  I'm not sure what you mean when you ask what you can do about the loan. Are you looking to try to contest the validity of the first loan, are you trying to pay the loan off and keep the home, or are you looking to walk away?
  You have the same rights as any heir to leave the home and owe nothing. Or you can pay off the loan at the lower of the balance owed or 95% of the current appraised value. Since you are currently working with an attorney, he can probably also probate the home so the title can be changed to you and your sister, his heirs, if you want to keep or sell the home. If you want to walk away, the lender can foreclose, and you do not need to change the title.
  If you are thinking that the initial loan was done inappropriately and are looking for some way to contest it, that would be a legal question you should discuss with an attorney. I don't know what documentation you have but you would need to talk to the attorney to determine if he/she felt you had any recourse based on the facts of your case.
  Reply to Michael
Daniel M.
June 30th, 2021

My mother is interested in starting the payoff the phone number list it does not work we need a new phone number so we can contact someone her name is Dorothy Smith.
Reply to Daniel
- Michael Branson
  July 10th, 2021
  
  Hello Daniel,
  If you look on the HUD website, it lists the following information for loans to be paid in full for HUD HECM's serviced by NOVAD:
  NOVAD Management Consulting
  Shepard's Mall
  2401 NW 23rd Street Suite, 1A1
  Oklahoma City, OK 73107
  Toll-Free: 1-800-CALLFHA (1-800-225-5342)
  Fax: (800) 489-1733
  They do also list a couple of email options and if you would like to check those out, I would suggest you check the HUD website at https://www.hud.gov/program_offices/housing/sfh/nsc/fmaddr for that information.
  Reply to Michael
Janice
June 29th, 2021

My mom's home is in reverse mortgage , HUD serviced by Novad. They currently hold the deed. The heirs are not planning to try and keep the house. The home is filled with furniture that none of the heirs are able to take. Is it our responsibility to empty the home of all furniture?
Reply to Janice
- Michael Branson
  June 29th, 2021
  
  Hello Janice,
  
  If you leave the furniture in the home, the lender will dispose of it after they take the title through a foreclosure action or if another party outbids them at the foreclosure auction, they will decide what to do with the remaining personal items.
  I would suggest you contact an estate sale company though and have them visit the home and tell you if there is enough personal property to conduct an estate sale. If so, they will arrange for the sale, sell the items and at the conclusion of the sale, donate any remaining items and give you the receipt that you can use come tax time.
  You may find that you can make enough money through the sale to help with some expenses and the estate sale companies do all the work.
  Reply to Michael
Heather F.
May 16th, 2021

Hi Arlo, we are having tremendous trouble with Novad getting back to us whether its via email or phone. Numerous hours on hold every time we call and being told they will get back to us in 5 business days...and then we hear nothing. We are trying to sell our home that has a HECM reverse mortgage serviced by Novad. I do not know what to do to actually get Novad to move forward with an appraisal as it is our intent to sell home as soon as we can. Do you have any suggestions on what further steps we can take to make this happen before months go by and we lose our interested buyer or worse be threatened with foreclosure?
Reply to Heather
- Michael Branson
  May 16th, 2021
  
  Hello Heather,
  
  I honestly do not know how to advise you in this case. Have you presented NOVAD with an offer from a buyer and asked them to approve the sale for an amount less than what is owed on the loan? There is no agreement in the loan terms for the lender or HUD to accept a short sale amount if you decide to sell the home, that would be a completely voluntary action by HUD. They are not bound by any terms to accept any offers for less than the amount owed regardless of the value of the home for payoff of the loan by a third party if you want to sell the property.
  The agreement to accept 95% of the current market value is based on the passing of the borrowers and that is extended to the heirs of the owners only. If you want to sell the home to a third party for any amount that is at or above the amount necessary to pay the loan in full, you may do at any time and do not need to wait for HUD or NOVAD. You just have the closing agent send in a Beneficiary's Demand Request and they will supply the amount needed to repay the loan.
  
  Because a sale is a voluntary action, HUD is not required to participate in the sale of the home by accepting payment for less than the amount owed on the loan which would lock in a loss on the loan. However, the loan is a non-recourse loan if you do decide to leave the home anyway.
  This means that the lender cannot seek repayment from other assets owned by the homeowner but that does not mean that a voluntary foreclosure is free of all other repercussions. I would encourage you to discuss any possible implications based on your circumstances with your tax advisor before making any final decisions.
  Reply to Michael
Mickey
May 10th, 2021

I am the executrix of my mother's estate. HUD oversees her reverse mortgage. We cannot get an answer regarding the payoff. We have tried, our attorney has tried. It is in probate. We want to pay the balance off.
Reply to Mickey
- Michael Branson
  May 10th, 2021
  
  Hello Mickey,
  
  When you say HUD is in charge, are you trying to deal with HUD or with their servicer, NOVAD? NOVAD is responsible for servicing the loan and they are the ones to whom you should direct all requests.
  You need to send them the information showing that you have the power to act on behalf of the estate and send them a demand request. I am sure that your attorney is aware that there are federal laws regarding the timing of issuance of a demand for payoff to which creditors must adhere or they are liable.
  However, the lender must receive evidence that they are dealing with a borrower or someone who has authority to work on behalf of the borrower or the estate. If NOVAD has never received such documentation, it should be easy to get them what they need to supply you with a Beneficiary's Demand for Payoff.
  If they have received it and they simply will not adhere to it, then you may need to have your attorney approach it from that angle since the lender (in this case HUD's servicer) is not complying with the law.
  Reply to Michael
Stephen M.
April 29th, 2021

How long can we live in house after Parents past away? who to call for payoff?
Reply to Stephen
- Michael Branson
  May 10th, 2021
  
  Hello Stephen,
  
  The timeframe to vacate can be as short as 6 - 7 months and can extend to over 2 years in some instances. There is no way to know for sure so you can't take anything for granted. The lender can contact you to ask your intentions and begin their actions immediately based on what you tell them.
  The loan becomes due and payable when the last borrower on the loan passes permanently leaves the residence (as would be the case if they moved or passed away) and how quickly they move from there depends on several issues which also includes appraisal.
  The people you need to contact can be found on the monthly statement that they received and should be there in the house. Hopefully, the parents kept things in a place where they are easily found.
  The one issue you might have is if the parents did not send the lender authorization for you to speak to them and them to you regarding the loan, you will need to get something from a court to show that you are the heirs.
  The lender will not release information without authorization from the borrower or a court and if you have a will or trust naming you as the executor or the only heirs, that will not be difficult.
  Reply to Michael
Sarah W.
April 27th, 2021

Hi ARLO,
My mom just passed and has a reverse mortgage with Novad. Myself and my partner had been living with her for a few months before that. How long will they give me to auction the contents of the home before we must leave the property?
Reply to Sarah
- Michael Branson
  April 27th, 2021
  
  Hi Sarah,
  
  The lender cannot evict a lawful resident from the home until after it has completed a foreclosure procedure and is the legal owner. Until such time, the home still belongs to your mom, her estate or her heir(s) and the lender cannot remove someone from the home who lawfully occupies it.
  To conduct a foreclosure, the lender must first have the home appraised then contact the borrower's heirs and determine what they wish to do (sell the home, pay off the loan or walk away).
  The lender can begin foreclosure at this time to keep from stalling tactics of some heirs who have no intention of doing anything but take as long as possible to delay the inevitable and a foreclosure usually takes about 6 months or longer with the steps the lender must take and the legal process to complete once it has been filed.
  And you may want to ask your lender if you can get more time right now because HUD had sent out a notice that they were giving extensions of 6 months to lawful residents due to Covid. There is a possibility that you would be able to get the 6-month extension on top of the time it takes to foreclose and that could give you a year or more before having to leave.
  I would caution you not to expect this long and have your plans made so that if things materialize faster, you are not caught unaware but I would be really surprised if they would be ready to evict in less than 6 - 8 months and you may have longer.
  Reply to Michael
BRENDA M.
April 13th, 2021

Hello ARLO,

My husband and I have a reverse mortgage and he recently passed away, and I am not sure what needs to happen now. We are both listed on the mortgage, do I contact Novad? I live in Florida.
Reply to BRENDA
- Michael Branson
  April 13th, 2021
  
  Hello Brenda,
  
  I am sorry for your loss. This cloud's silver lining though is that since you are both on the loan, you don't need to do anything at all. As long as at least one original borrower is still living in the property, the loan is still valid and there is no notification required.
  Reply to Michael
- Jean S.
  April 23rd, 2021
  
  I have completed form, but there is no envelope enclosed where do I send it? Annual cert. of occupancy for nbs of hecm alternate contact letter.
  Reply to Jean
  - Michael Branson
    April 27th, 2021
    
    Hello Jean,
    
    I would hate to give you bad information and we are not affiliated with NOVAD but as I look at their website, I see that they have an Annual Certification Letter online with an address at the bottom of
    
    NOVAD Management Consulting
    2401 NW 23rd Street, Suite 1A1
    Oklahoma City, OK 73107
    
    The phone number listed on the form is 877-622-8525 and they also list a fax number of 800-489-1733. I would say that you could probably fax it to that number if you have a fax machine available to you and you may also want to follow up with the original in the mail but that is your call. In any case, I would suggest you do something so that you have a receipt that the certification was sent and received by NOVAD.
    Reply to Michael
    - Marylyn K.
      July 7th, 2021
      
      I have a reverse mortgage handled by Novad. A horrible company, had a problem getting the occupancy letter to them, send by mail and they said not received, I even faxed it to them, No reply, then I got a repayment letter because they did not have the occupancy letter. Finally contacted Maryland office and then was told everything is ok, just got another repayment letter and again was told it was sent in error. Is there a way I can get this mortgage handled by a different company rather than Novad?
      Reply to Marylyn
      - Michael Branson
        July 12th, 2021
        
        Hello Marylyn,
        
        HUD announced that all questions and issues regarding loans being serviced on their behalf should be directed to NOVAD in their 2014-19 Mortgagee Letter on September 18, 2014 (https://www.hud.gov/sites/documents/14-19ML.PDF). HUD also continues to keep the following page up on their website directing all individuals to contact NOVAD for servicing questions: https://www.hud.gov/program_offices/housing/sfh/nsc/fmaddr. NOVAD is HUD's only servicer at this point.
        
        HUD also posts a "Customer Service: questions and complaints" information page on their site at this address: https://www.hud.gov/complaints/customer_service. It may or may not be a benefit to contact HUD directly sending them the documentation you have received from NOVAD showing that they have called the loan erroneously twice and hopefully they have sent you rescissions in writing you can also include. I don't think it can be too well documented that they have made the error on more than one occasion.
        
        NOVAD is HUD's servicer for all loans that have been assigned to HUD and there is no way to move to another servicer if HUD owns the loan. The only way you would be able to move the servicing away from HUD or their assigned servicer would be to refinance the loan with another lender at this time if it qualified under the current guidelines. That would be up to you if you want to see if you can qualify for a refinance transaction at this time but there may or may not be costs associated with that as well as new qualifying criteria.
        Reply to Michael
Larry T.
April 7th, 2021

Hi Arlo,

I received a letter from my reverse mortgage my account. I am NBS. wife passed away 2016. married 1964. obtained reverse mortgage in Texas, 2008. Paperwork took my name. never put back on. for 5 years. The company has been trying to take my home. I sent everything they ask for. April 1,2021, I received a letter from them my account is being transferred to NOVD 4/31. WHY?
Reply to Larry
- Michael Branson
  April 7th, 2021
  
  Hello Larry,
  
  NOVAD is the servicer for HUD. In 2019, HUD issued guidance for deferral of loans with non-borrowing spouses. Loans originated prior to August 4, 2014 were not eligible for deferral under the terms of the loan when you had a non-borrowing spouse and were to be called due and payable under the terms of the loan based on the loan documents.
  However, HUD issued guidance in 2019 that stated that deferment on loans with a non-borrowing spouse could be arranged after the loans were assigned to HUD. By assigning the loan to HUD (and the servicing to NOVAD), the process for allowing the deferment has begun.
  You can find the HUD notice on their website.
  Reply to Michael
DIANN S.
March 22nd, 2021

I AM TRYING TO FIND OUT WHO HAS MY REVERSE MORTGAGE. GENERATION DID HAVE ITI??????
Reply to DIANN
- Michael Branson
  March 23rd, 2021
  
  Hello Diann,
  
  Do you know anyone at a local title company you can call? Very often you can check the documents that have been recorded and can determine from the last recorded assignments where the loan is but that is not always a sure sign of the current servicer. If you have not had a statement in some time, the chances are very good that your loan was assigned to HUD and NOVAD is the servicer of the loan now.
  If nothing else, you can get the FHA Case Number from the original recorded documents and with that number, you can contact the local HUD Homeownership Center (HOC) and request information from them. Let them know that the servicer has not provided a statement pursuant to the terms of the agreement and that you need that information. If needed, you can file complaints with the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) as well.
  You can find your HUD HOC that handles your area on the HUD website here. The FTC website is here: https://www.consumer.ftc.gov/. And the CFPB is here.
  Reply to Michael
Marsha
February 23rd, 2021

I received a letter stating my property tax was delinquentthis is not true, nor has it ever been. My property tax is current. Alpine county (Markleeville, California) I sent proof of this to Novad along with a letter stating this was not so. I now have 3 more letters saying they are going to foreclose on my loan. This is causing great stress. I do not fall under any of the categories they describe. Help
Reply to Marsha
- Michael Branson
  February 24th, 2021
  
  Hello Marsha,
  NOVAD is notorious for poor communication. The first thing I would do is check their notices to you carefully as well as the county records to be sure there were no supplemental taxes assessed for any reason of which you may not have been aware.
  They may be talking about a supplemental billing or a past billing that you did not even realize you had or missed that the county issued, and you need to verify that there are no past payments or supplemental amounts due.
  If you verify that there are no taxes due whatsoever (normal payments or supplemental invoices), then you need to send a registered letter to NOVAD immediately (along with copies of the documentation showing your taxes are completely current) informing them of your trials and their failure to respond (be sure to keep copies of everything you send and the verification from the post office that the letter was delivered).
  I would suggest that you also call them and keep asking for a manager until you reach someone who can either assist you or explain to your satisfaction why they believe there are taxes due when you have sent documentation from the county showing no taxes are completely paid.
  If you are unable to resolve the issue, you may need to engage the assistance of an attorney. If the servicer insists that the taxes are not paid, eventually they can begin a foreclosure action and the attorney would know what would be needed to contest that action and see if there is any way for you to seek damages from NOVAD for the errors.
  Just remember that your first action needs to be to resolve the issue and stop any further action against you or the property. You can file complaints with the Consumer Financial Protection Bureau, the Federal Trade Commission and HUD later but do not wait until it is too late.
  Do what you need to do to be sure there are no defaults and then stop any actions before they begin by sending the necessary documentation to NOVAD and keep on them until they resolve the issue.
  Reply to Michael
  - J Hanley
    May 6th, 2021
    
    I would recommend you put in a call to your Federal Senator and or Congressperson's office and ask for assistance. Federal agencies and the like will generally jump to attention when they hear from one of them!
    Reply to J
ARTHUR W.
February 7th, 2021

My RM was recently transferred to novad. I made over 8 calls to get data on my loan, left 6 messages ..... never a reply!!
You people are all fakes. Arthur W.
Reply to ARTHUR
- Michael Branson
  February 9th, 2021
  
  Hello Arthur,
  NOVAD is HUD's loan contract servicer and as such, you do have some recourse. You can contact the HUD Homeownership Center (HOC) office that handles your area and seek assistance from them. The HOC offices are listed on the HUD site here. HUD is a government agency and therefore they answer to your congress and senate representatives and you can also seek help from the FTC and CFPB since they work with consumers on lending issues.
  I would recommend that you try to work through the information on the HUD website for NOVAD though
  and remember that there may be delays now more so than normal due to pandemic issues and keep trying but I agree with you, it should not take 6 or 8 calls to get information on your loan.
  Reply to Michael
Brian W.
January 5th, 2021

Late on NYE my mother received a letter from NOVAD stating that ONE of FIVE possible reasons for terminating the reverse mortgage occurred. While she was in hospital and rehab for 5 1/2 months in 2020, she returned home late July 2020 and has been in her home since. She was frantic, of course, all the LONG weekend and NOVAD was apparently overloaded with calls this morning so she left her number for a call back. From what I can tell NONE of the reasons for termination have occurred. They state she has until 01/20/2021 to buy the house back or it will go into a short sale. WTH??? So out of the blue they can toss out an 86-year-old woman who relies on a walker to get around? I'm gob smacked but feel there HAS to be some kind of clerical error. Any suggestions would be greatly appreciated. Thank you!
Reply to Brian
- Michael Branson
  January 5th, 2021
  
  Hello Brian,
  
  I would suggest that you keep calling until you reach the lender but in the meantime, put together a response that you send in via registered mail that outlines that mom was out of the home for medical reasons from XXXXX date to XXXXX date (put in some verification if you have records to show the dates) and that she has not failed to pay taxes, insurance or other assessments of the home if all other property charges are current and send them immediately to the servicer along with the copy of the letter you received from Novad.
  I would copy the HUD office that would be responsible for your geographic area and you can find that office here: https://www.hud.gov/program_offices/housing/sfh/sfhhocs.
  
  Do not wait for the foreclosure to begin to take action. If you have the documentation to verify that she has never been in violation of the terms of the loan, present them before they file any further paperwork.
  The lender cannot just foreclose on borrowers without cause, but you need to determine what they believe they have discovered so you can disprove their premise.
  Anyone can make a mistake, but you just need to nip it in the bud before it goes any further.
  Reply to Michael
JANICE A.
November 11th, 2020

Help!!!! My husband passed in July; we have a reverse mortgage with Novad. I was too young when we took the reverse out, but my name is on the deed. I consulted with Hud sent paperwork several times (marriage certificate, etc.) Just yesterday received a letter to pay the loan foreclose etc. I am freaking out.
Reply to JANICE
- Michael Branson
  November 11th, 2020
  
  Hello Janice,
  
  I am sorry to hear of your situation.
  Have you ever spoken with them regarding your ability to remain in the home after your husband's passing?
  Unless you and your husband took the loan out in 2015 or later, there is no forbearance period on the loan for non-borrowing spouses.
  Prior to the rule change in 2014 that became effective in 2015, HUD had no provision for non-borrowing spouses to remain in the home after the borrowing spouse permanently left the property.
  Unless you have something from them stating that they would allow you to remain contrary to the terms of the loan when it closed, that loan is now due and payable.
  
  You do have options, although they may not be good ones. If you are over 62 now and you qualify, you can refinance the loan with a new reverse mortgage in just your name.
  You can also sell the home and use the sale proceeds to buy a new property and again, you can use the reverse mortgage for purchase program if you are 62 or over and qualify under HUD's current parameters.
  You can also refinance the exiting loan with a new loan that is not a reverse mortgage and if the reverse mortgage balance is higher than the value of the home, you can pay off the balance of the old loan at the amount owed or 95% of the current appraised value, whichever is less.
  
  I know those may not seem like the greatest of options at this time but the best time to consider these possibilities was when you first considered doing the loan knowing that the loan would come due if your husband passed before you and you were not on the loan.
  We always advised borrowers not to do the loan and not include the under-aged spouse before HUD added the protections for non-borrowing spouses unless borrowers had specific plans that would protect them at that time (another property the spouse intended to occupy anyway, adequate life insurance, etc.).
  Now that the loan is already due and payable, I am very sorry that I do not have any other real fantastic answers for you.
  I just suggest that you consider all possibilities quickly and that may mean contacting a real estate agent, a lender an attorney or all the above.
  Reply to Michael
  - Arlene H.
    December 7th, 2020
    
    NOVAD is servicing my HUD reverse mortgage, I had a homeowners claim that was settled and final work done and inspection done, I received a check from the insurance company for $8500 in final settlement which I went to NOVAD in Oklahoma City OK as requested which they received on Monday morning 11/23 at 10AM, this was supposed to be deposited in their accounting department, sent to HUD and a check for $8,500 was to be issued directly to me....it was handled by Cassie H. who is in charge of my case, it's been 2 weeks and no funds have been released, she has done nothing to help me find out what happened to this check or who is holding up my money. I am an old lady desperate to have this money which is due my contractor and some funds disbursed to me for living expenses...I have called her and left emails and all she tells me is that there are no funds in the account, why after 2 weeks this still is pending is beyond me....I want to contact HUD to let them know how this company is failing to service my reverse mortgage...
    Reply to Arlene
    - Michael Branson
      December 8th, 2020
      
      Hello Arlene,
      
      Have you contacted the insurance company to determine if the check has been cashed? I would contact them and get the details and if the check is still outstanding, have them stop payment and reissue.
      If it has been cashed, send a registered letter to Novad management with copies showing the work was completed, that they cashed the insurance check a demand for payment.
      If they still do not respond, you may need to include copies to the Consumer Financial Protection Bureau and HUD. Keep copies of everything you send so you can prove what you sent and when you sent it.
      If needed, you may need to seek assistance from an attorney but hopefully when they receive your documentation, they will find your funds.
      Reply to Michael
Edward C.
October 20th, 2020

Is NOVAD legitimate or simply a money-making 3rd party servicer scam? When I check them out on BBB, I get a 403 Forbidden message. All complaints have been erased? How much of my money are they skimming off my reverse mortgage and how come Hud can't tell me anything about them as a company, either? Frankly, I'm ready to sue.
Reply to Edward
- Michael Branson
  October 20th, 2020
  
  Good Afternoon Edward,
  Novak is HUD's designated servicing agent. They can't skim money from your reverse mortgage, nor can they charge you any other fees on the loan other than what your agreement allows and what you have already been paying.
  I do not know what you have asked of HUD that they have not answered nor do I know why you received the internet notice so I really can't comment on those issues. You would need to seek the advice of an attorney to determine if you have any recourse for possible lawsuit because I don't know why you even feel there could be an issue at this point and could not give you legal advice even if I did. I'm sorry, I do not know the nature of your actual grievance (other than not knowing who Novak is) so I can't really even offer any additional information.
  Reply to Michael
Tom
June 26th, 2020

ARLO: Facts: I have a 2010 HECM on my Homestead, which HECM was assigned to HUD in the past year. I want to put all my rights, title, and interests to the Homestead into my own individual Revocable Living Trust, with a plan to help keep the Homestead in the family. My HECM says that any such conveyance must be "to a trust that meets the requirements of the Secretary" to avoid being a prohibited conveyance. Q: First, what are those "requirements" - and secondly, if my lawyer indeed can craft my Living Trust as one that "meets" those requirements (assuming there is not a requirement for an express HUD approval), can we avoid the need for what I worry may be a quite difficult task these days to secure a confirmation of our success in doing so, any time soon, from the private entity that now "services" my HUD-held HECM?
Reply to Tom
- Michael Branson
  June 26th, 2020
  
  Hi Tom,
  
  Most of the trusts written today do meet HUD requirements as those requirements are mostly there to protect the borrower. All you need to do is have your attorney craft the trust then submits to your servicer (Novad?) before you move the property into the trust. That way if there is something that must be amended, it can easily be done before you have conveyed title to the property. I think you will find that if your attorney has worked with any reverse mortgages in the past, you will have no problems at all.
  Reply to Michael
Paul J.
May 17th, 2020

When my grandmother passed away, there was no equity left in the home, and all non-real estate assets had a named beneficiary, so nothing went through probate. I was the administrator with almost nothing to do - we sent the same letter to NOVAD but, even years later, they have not taken title. The home is still in my grandmother's name. I think they are just waiting around for someone to buy it when it goes into foreclosure auction, and then the buyer assumes the obligations (unless the buyer is smart enough to check the title for liens).
Reply to Paul
- Michael Branson
  May 17th, 2020
  
  Hello Paul,
  
  I am not an attorney and cannot give you legal or tax advice. The loan is non-recourse and therefore, the lender can never look to any other assets for repayment of the loan.
  HUD has a process for accepting a property via a Deed in Lieu of Foreclosure and I don't know what your letter said or offered to do or what other steps you took to complete a Deed in Lieu of Foreclosure, but I can tell you that a letter alone would not have allowed them to proceed with this process.
  And if there are any other liens on the property, the lender or HUD cannot accept a Deed in Lieu of foreclosure at any rate. HUD and lenders are forced to go through a full foreclosure if you did not have full authority to transfer the title and if the title was not clear of all encumbrances or clouds.
  If there are any other liens on the property and a lender or HUD accept a Deed in Lieu of Foreclosure, they "inherit" those other obligations whereas if they foreclose on the loan, any other lienholders have the opportunity to protect their lien position by paying the amounts owed to HUD to move into a first lien position.
  If they do not (and they almost never do), then that lien is removed and the Deed upon sale goes to the lender or to HUD minus the other liens. I don't know what steps you took with the servicer to be certain that the property was even eligible for a Deed in Lieu of Foreclosure but it sounds like you may not have verified this option before you sent in your offer to "surrender".
  Have you followed up with them to determine if this was even a viable alternative? For the lender, or servicer to even speak to someone who is not the borrower or authorized by the borrower to speak to them on their behalf, you would need to have taken title to the property or provided documentation to them that they have the borrower's authorization to speak with you. Did you provide the lender with this documentation?
  
  With regard to other obligations, remember that property charges are not lender charges and therefore, even though the lender will never look to anyone else or any other assets other than the property for repayment, others may have different options for debts other than the reverse mortgage.
  I would suggest that you contact an attorney in the area to determine the rights and obligations of the estate versus other debtors. Another thing you might want to ask your attorney is about the maintenance and any possible liability should anyone be injured on the property while it is still owned by the estate (any insurance the lender has placed on the property after you quit paying covers the dwelling only -it does not cover liability should someone be injured on the property or any contents in the home).
  He may tell you that if the estate has/had no assets and since mom has already passed, there is no liability that anyone can seek payment from but I honestly do not know and as I said, I cannot advise you in legal matters anyway. The lender can only look to the home for repayment of the obligation and that is the non-recourse nature of the reverse mortgage debt. If there are other debts or possible liabilities about which you are concerned, you really need to seek the advice of an attorney.
  Reply to Michael
- B. Sharpe
  May 28th, 2020
  
  We have a neighbor with a reverse mortgage (Novad) that died in 2017. Please tell me how you managed to get Novad to do anything
  Reply to B.
  - Michael Branson
    June 2nd, 2020
    
    Good Afternoon,
    
    Novad is HUD's servicer. They move at their own speed and according to circumstances. I do not know if there is a cloud on title or what that could possibly be holding things up for 3 years, but I am assuming that they know about the passing of the borrower, correct?
    If there is a family member living in the home and HUD is not aware of the passing, that could also be a reason for the delays.
    Reply to Michael
- Mike Esper
  August 21st, 2020
  
  When my grandmother passed away, there was no equity left in the home, and all non-real estate assets had a named beneficiary, so nothing went through probate. I was the administrator with almost nothing to do - we sent the same letter to NOVAD but, even years later, they haven't taken title. The home is still in my grandmother's name. I think they are just waiting around for someone to buy it when it goes into foreclosure auction, and then the buyer assumes the obligations (unless the buyer is smart enough to check the title for liens).
  Reply to Mike
  - Michael Branson
    August 21st, 2020
    
    Hello Mike,
    
    I cannot pretend to know what their motivations are or why they have or have not taken action but any liens behind the lender would be wiped out at foreclosure sale unless the home sold for more than what is owed to the lender or one of those lienholders stepped up and paid off the first lienholder to protect their interest in the property which is not likely give the fact that there is no equity.
    And if it did sell for more, the lender would be paid off first since that is the amount of the foreclosure starting sale bid.
    It does not hurt the lender for there to be secondary liens at the time of foreclosure as those liens do not remain with the property after the Trustee's Sale.
    Therefore, there is no motivation for them to wait just in the hope that they do not inherit any other liens on the property. But again, why they are not acting is anyone's guess.
    Reply to Michael
Lora H.
May 4th, 2020

The person listed on the reverse mortgage is deceased for over a year and there are convicted felons (including the grandson) living in the home. There is illegal activity, the home is being destroyed and has become a danger to the surrounding neighbors. How can we get an eviction notice posted? The mortgage is serviced by Novad.
Reply to Lora
- Michael Branson
  May 4th, 2020
  
  Hello Lora,
  
  I would suggest that you check the public records and pull a copy of the Deed of Trust or Mortgage. On that document (Usually the upper right-hand corner) will be a HUD Case Number. Send the information about the borrower and the property both to Novad and to the HUD office in your area. You can find out which HUD office services your area at https://www.hud.gov/localoffices/regions. Click on the region in which you are located, then go down to near the bottom and look for the option of "Contact My Local Office. I have seen it listed in both the "Quick Links" and the "I Want To" sections of the page so it may vary depending on your location. But use that information to contact HUD. I do not know how successful this will be but it is possible they are not aware of the borrower's passing and if the property is being damaged and interest is still accruing, it is in the program's and HUD's best interest to act.
  
  Novad services for HUD and they can be reached at (I would contact both):
  
  Novad Management Consulting
  Shepard's Mall
  2401 NW 23rd Street Suite, 1A1
  Oklahoma City, OK 73107
  Toll-Free: (877) 622-8525
  Fax: (800) 489-1733
  
  Novad lists 3 general inquiry email boxes and I honestly do not know which would be best, if any of them but they are:
  
  • All Borrower inquiries: customerservice@novadconsulting.com
  • Payoff requests for all Secretary Held mortgages: payoffs@novadconsulting.com
  • HECM servicer inquiries: hecm.servicing@novadconsulting.com
  Reply to Michael
Michael Branson
July 25th, 2022

Hello John,

You can make any payment on the loan at any time without penalty. While there are no payments due on the loan while you still live in the home as your primary residence and make all payments on time of the property charges (taxes, insurance, HOA dues if any), you can choose to make payment in any amount up to and including payment in full at any time and there is no penalty for doing so.

The MIP is not cancelable. The amount you pay is determined as a percentage of the outstanding balance though so if you do pay down the balance of the loan, the MIP charged will also be decreased at that time. Be sure to check your loan documents to determine how payments will be applied.
Reply to Michael

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