Home / Questions / I am I responsible for the condo insurance and condo fees after death of my mothers Reverse Mortgage?

My mom did a reverse mortgagee & she has now passed away. My question is I want to give the condo back to the bank through a Deed in Lieu but since my brother who was living in the condo for the past 15 years will not move out the bank is telling me I have to evict him? Now my mom's insurance carrier is saying they are non-renewing her condo insurance. I am I responsible for the condo insurance and condo fees and anything that goes on in the condo? My brother has now moved in his girlfriend and our cousin and her boyfriend. It's turning into a nightmare as I was told we could just walk away from it. The bank stopped the Deed in Lieu saying since they are living in the condo they will not start the process. So I need to know what I am responsible for. If someone gets hurt & I don't keep the insurance and if I stop paying the condo fees & taxes what will happen? Thanks!

By Christine S. on 11.07.2018

Hi Christine,

There are different levels of liability.  The lender can only seek repayment from the property for the loan.  The fact that you have relatives who won’t leave the house and may be creating other liability for you are a different issue altogether.  I can’t give you legal advice so the best thing I can do is suggest you contact an attorney to determine your rights and your possible liability. 

If the lender has to force-place insurance, it will cover the dwelling only and will not cover you if you are the current property owner or mom’s estate from any other legal entanglements if someone is hurt on the property, etc. 

The lender cannot accept a Deed in Lieu of Foreclosure unless there are no liens and the property are clear and “broom clean”.  What this means is that your brother has a great deal since he is not paying anything but he’s not doing you or mom’s estate any favors by just continuing to live there without helping you dispose of the property. 

Unfortunately, we see this a lot.  Family members who have a good thing living off of parents’ or other family members’ equity but when the gravy train runs out, they don’t want to leave!  This hurts not only other family members and heirs, but the entire program as losses to the HECM program MIP fund rise and then HUD keeps cutting the program back for seniors who really need the program. 

I’m sorry, I wish I had better news for you, but the lender can only do so much and if your brother continues to live there, whoever has the title to the property may have other liabilities as well. 

I would certainly recommend that you contact a licensed attorney to determine what your liability is and then there is always tough love – evict him!  Seems that after 15 years of living at moms with no mortgage payment, the 4 of them should be in fine financial shape by now to find a new place.

#MMIFUND

 

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