Dear Christine,

I am sorry you are dealing with this during what is already a difficult time. Losing a parent is hard enough without having to sort through property and family issues on top of it. I will walk you through the key points so you have a clear understanding of what you may be responsible for.

A reverse mortgage is a non-recourse loan, which means the lender can only look to the property for repayment. You are not personally responsible for the loan balance itself. However, when someone stays in the home after the borrower has passed, it creates separate issues that are not covered by the reverse mortgage rules.

A Deed in Lieu is voluntary. The lender will only accept it when the home is vacant, clear of personal belongings, and in good condition. If anyone is still living there, the lender will not proceed, and they will require the heirs or the estate to handle the occupancy issue first. This is why they told you eviction would be needed before they can move forward.

Regarding insurance, once your mother passed, her policy is no longer valid. If the estate still holds title and the home is occupied, there is a risk that someone could be injured on the property. Without liability insurance in place, the estate could be exposed. This is why it is very important to speak with an attorney in your state, so you understand any legal liability that may still exist.

If condo fees and taxes go unpaid, the association and taxing authority can place liens on the property. These liens sit ahead of the lender and can delay the foreclosure process. Eventually, the lender will foreclose if the estate does not settle the property, but until that time there can be consequences for the estate, including legal notices and possible collections.

At this point, you have two main issues: the legal responsibility tied to the estate and the occupancy of the condo. These are not issues the lender can resolve for you. You will need legal guidance from an attorney experienced in estate or real property law in your state. They can advise you about liability, eviction options, and how to move this forward so the estate can be settled.

I wish there were a simpler option to hand back the keys, but the presence of occupants prevents the lender from accepting the Deed in Lieu. An attorney can help you take the next step so you can protect both yourself and the estate.

If you need help understanding anything the attorney or lender tells you, feel free to reach back out. I am happy to explain the reverse mortgage side for you.