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My mother owns a reverse mortgage home. My brother (age 62+) has been living in the home for 10+ years. He is not a co-borrower. Mom recently passed away. My brother wishes to exercise some sort of occupancy rights extended to inhabitants who are offspring/heirs and greater than 62 yrs old. We’ve been told this relates to a new rule in effect in CA. Is any part of this a real thing or is it 100% fiction?

By Joanne T. on 01.04.2019

Hello Joanne,

There are no special occupancy rights for heirs of reverse mortgages.  All heirs have the right to keep the home, sell the home or simply walk away and owe nothing but the loan becomes due and payable once the last original borrower on the loan no longer occupies the home as their primary residence. 

As an individual who is 62 (or older), if he owns the property, he can see about getting a reverse mortgage of his own but the benefit amount would be based on his age and the current HUD parameters which may or may not be adequate to pay off the existing balance of mom’s mortgage since mom was older and would have received a higher percentage benefit as an older individual.   

But the home may have been valued lower at the time so there is no way to know if the current program parameters will work without him having to bring cash in to close the new loan unless he checks the calculator and runs his circumstances.

At any rate, there is no “new rule” of which we have been informed that would give him any different rights than any other individuals to remain in the home.  The loan is now due and payable and if he is not the homeowner (in other words, if you and other heirs also own the home now), he would be hard-pressed to obtain any financing unless he bought you out of the property.

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