Hello John,The mortgage insurance remains in effect, and therefore, any agreement to accept less than 95% of the current appraised value would require HUD's approval as it would require a higher payment from the MIP fund when they pay the claim on the loss. We really cannot predict what HUD's position may be in the future. They have reviewed individual offers in the past on sales, though, and it never hurts to present an offer. You never know their answer (but unfortunately, how long it may take to get an answer sometimes).

Hello Andrea, As the heir to the property, you aren't buying the home, you already own it. It is the payoff that you are discussing and under most laws, as the owner of the property, you are entitled to a copy of any appraisal done on the home. I would suggest that you contact an attorney and ask what your rights are if you believe you are not being given full disclosure of the actual appraised value.

Hello Kendra, Their terminology is a bit confusing; I agree. However, this pertains to you selling the home, not keeping the home, and paying the loan off as the heir and current owner of the property. Just remember, as mom's heir, you are not "buying" the property, you inherited it from mom. Now you just need to pay off the loan that has become due and payable. The terms of the loan state that as an heir, you have the right to repay the obligation at the amount owed or 95% of the current market value. Make sure that when you contact the lender, you are not talking to them about a "sale" or purchase of the property. You are NOT "buying" the home from mom's estate - you now own it or should own it because of being her heir. It sounds to me like they are either thinking that you are selling the home or possibly just telling you that if you do sell to a third party, the deal changes, and the offer of payoff at 95% of the current appraised value is only good if that 95% meets or exceeds the amount owed if you sell it instead of keeping it. You don't have a "sales price" as the heir. You inherited the property from mom and you just want to pay off the loan (which means you need to have either the cash available or a new loan ready to put into place). If you changed your mind and want to sell the property to a third party, the lender is not required under the terms of the loan to offer the same deal where they discount the payoff down to 95% of the current appraised value. That would be considered a short sale and subject to a whole new review and approval. My advice is to be sure you do not use the term "buying the home from my mom's estate" and begin making sure you treat the house as your property as the heir, since that is what it is. If you have not already taken the steps to change the title over to your name, you may want to take care of that. By the way, if you change your mind and sell it later, that is your choice and there is no time limit you would need to wait to make that call.

Hello Christopher, You will open an escrow just like any other loan and the escrow/title/settlement attorney will send to the lender for a Beneficiary's Demand for Payoff statement. The lender will supply that statement based on the lower of the amount needed to pay the loan in full or 95% of the current value based on the appraisal they have procured. To make this work, you should have already received title to the property because you cannot "refinance" a property you do not already own. You should have been in contact with the lender who is servicing the reverse mortgage to let them know of your intent to pay off the loan with new financing and copies of the paperwork that show that you inherited the property and now have title to the property so that they will honor the Demand Request. Lenders cannot give information to unauthorized third parties and they need a signed authorization from the borrower, or someone authorized by the borrower to give out any information on the loan (such as payoff figures). If you don't have a signed authorization from the borrowers to receive this information (and almost no one gets it before the borrowers pass), the lender needs to see that you now hold title (usually as a result of the will/trust/probate) and then they have the authority to give you the information you need to pay off the loan. If you have not yet done so, you need to let them know that you are paying off the loan and if you have not transferred the title into your name yet, that you are in the process so that they do not take additional steps to collect the loan thinking no one is working toward that end.

Hi Tina, HUD has some peculiar rules sometimes but sometimes there are specific reasons why they are pretty set on their timelines and appraised values/appraisals are one of those areas in which they do not waiver. They have set times in which they will require an appraisal to remain in effect and then there are procedures to cancel one and use another to prevent people from "appraisal shopping". After all, if the reverse were true and the second appraisal had come in higher, you would not have wanted them to raise the cost to you and the rules allow you to exercise your right to pay off the loan for 95% of the value regardless of the amount owed and they will hold it for a set amount of time pursuant to the rules in place. An appraised value is a value given on a set date. In other words, it is a snapshot in time. There may be other sales available between now and the date the appraisal with which they are working expires that indicates a lower value or a higher value but until the appraisal has expired, HUD will not entertain a new value, higher or lower, each time a new sale is available.

Hi Christopher, I'm afraid I don't quite follow you. Firstly, if your mother in law is looking to pay more than what is owed on the property, that would not constitute a short sale. A short sale is when the owner is selling the home for less than the loan amount owed. That would require the lender's approval if the seller was not coming in with the amount of the shortfall because they would have to agree to accept less than the full amount owed as payment in full for the lien. Your uncle does not need the lender's approval to sell the home for $300,000 when he only owes $289,000 and the full balance will be repaid with the sale. Let's suppose though that the facts were reversed and that there are family members who want to buy the home for $289,000 and the balance on the reverse mortgage is $300,000 and you were requesting the lender to accept a short payoff of the loan. This would require not only the lender's approval but HUD's approval as well since HUD would have to pay a claim on this loan to cover any loss. I do not want to make any assumptions here, but you say "my uncle" and my "mother in law" so is it safe to conclude that your mother in law is not directly related to your uncle other than by marriage and would not be considered an heir of your uncle? And you stated that your mother in law would like to buy for $300,000, but is that the current market value of the home or would you say that is below the current market value? If the sale price is higher than the amount owed, there is no need for a short sale and your uncle can sell to your mother in law directly without even enlisting the aid of a real estate sales person, avoiding the commissions. I would suggest that you use a reputable escrow and title company (even if your mother in law is paying cash) just to be sure there are no issues on title that are unknown and to be certain all paperwork and liens are handled correctly. If you are actually seeking a short payoff but the property is worth more than the loan balance, the short payment would not be approved. The lender will not accept a short payoff if they do an appraisal that indicates the property is worth more than the amount you are trying to pay, regardless of what your mother in law and uncle agreed to. If you fear that may be the case, I would suggest you look closely at the sales in the neighborhood and determine if you are willing to raise the price to at least a point high enough to cover all costs and loans owed. Finally, and this is the wild card answer because there are no guarantees on this one, if the property really is worth less than what is owed, you can get your information together to approach the lender about paying off the loan for 95% of the current market value, but that come with a risk and a catch. This option is reserved for heirs of the borrower. From your previous questions, I know that your uncle has a daughter, that he is still living (that he did not pass but has just moved) and that the lender has not yet called the loan due and payable. The lender and HUD are under no obligation to work with you at this time and may not even be able to give you any information since you are not on the loan, the borrower has not passed and you are not even the heir of the borrower currently going through probate on the property.