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My mom did a reverse mortgage & 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 has been 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. Am I responsible for the condo insurance and condo fees and anything that goes on in the condo? My brother has now moved in with his girlfriend, our cousin, and her boyfriend. It's turning into a nightmare, as I was told we could walk away from it. The bank stopped the Deed in Lieu, saying they would not start the process since they are living in the condo. 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 11.07.2018Dear Christine,
Navigating liability in this situation requires understanding the different factors at play. While reverse mortgages are non-recourse loans, meaning the lender’s repayment is limited to the property itself, your concerns regarding a relative refusing to vacate introduce a separate legal matter. This goes beyond financial considerations, and I strongly recommend consulting a legal professional to clarify your rights and assess any potential liabilities.
If the lender places insurance on the property, it’s important to understand that this coverage applies only to the physical structure—it does not protect you, as the current owner or executor of your mother’s estate, from legal issues such as personal injuries that may occur on the premises.
Regarding the Deed in Lieu of Foreclosure, the lender will only consider this option if the property meets certain conditions, including being free of liens and in a “broom clean” state. Your brother’s continued occupancy, particularly without contributing to the resolution of the property’s status, complicates matters for both you and your mother’s estate.
Unfortunately, this type of situation is not uncommon. Some family members remain in a home without financial contribution, relying on the equity of their parents or relatives. This not only places undue burden on immediate family but also has broader consequences for the Home Equity Conversion Mortgage (HECM) program, increasing lender losses and leading HUD to scale back support for seniors who genuinely need it.
While I wish there were a more straightforward solution, the lender’s options are limited in cases like this. Your brother’s continued occupancy may present additional liabilities to you as the titleholder, and you may need to consider legal action. A licensed attorney can help you explore your options, including potential eviction if necessary.
After 15 years of living rent-free, it’s reasonable to expect your brother to secure alternative housing. I encourage you to take legal steps to protect your interests and bring this situation to a resolution.
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