Hello Arleen,I'm not sure what you mean by "who has the first right of foreclosure." Each lienholder has the right to foreclose on their lien as allowed by their agreement and in accordance with state laws. However, the order of the lienholders significantly impacts whether a foreclosure action will eliminate other liens.If a junior lienholder forecloses, any senior lien would not be eliminated. The lienholder who forecloses may become the property owner, but the senior lien would still remain on the property. Conversely, if a lienholder in a senior position initiates a foreclosure, the junior lienholder would need to either cure the default or start their own foreclosure action to protect their interest. Otherwise, they risk having their lien removed in the senior foreclosure action.The lienholder with the least seniority often must assess whether there is sufficient equity to justify curing the delinquency so they can proceed with their own foreclosure. In some cases, depending on the loan type and the nature of the default, curing may only involve paying past due amounts on a property with equity. However, if curing the default requires paying off the entire loan, some lienholders may be unwilling or unable to protect their lien in this way, especially if the equity in the home is minimal or nonexistent after accounting for the senior lien balance.Hope this helps!

Hello Holley,All HUD reverse mortgages have two Notes and two Deeds of Trust/Mortgages. Your lender should have covered this, certainly in your counseling, but the second covers any advances that need to be made by HUD. Your mother should have received the sample loan documents with both the first and second documents at the time of application and again at the time of signing. I can't begin to comment on what communication may have happened or broken down during the process. And I don't know why they would be asking for more money now. You have every right to ask for an explanation.If an honest mistake was made, and they are asking her to re-sign and correct the documents, they are within the terms of the agreement to make this request, as clerical errors do occur. They don't typically cost the borrower more money, though, as the lender must remain within the terms they disclosed to you. Suppose the correction they are making now corrects an error within those terms. In other words, once your mom signs the documents, the funds are paid. In that case, the result is precisely what they disclosed or told you they would be; the lender has a right to make that correction and may be required to make that change to make the loan stay within HUD's requirements. You can and should get a clear explanation as to why you are being required to sign or pay anything. If you feel the lender is incorrect, you may need to consult an attorney. But remember that if the lender is within the terms of the agreement and you refuse to accommodate the request, they can call the loan due and payable. If you feel that the loan was misrepresented and you don't feel that the required second security instrument was ever discussed or disclosed, your mom never signed any such instrument, that's a different matter. If she is only now being asked to sign it, and that makes the loan no longer acceptable, and you would like to know how to nullify the loan, you would need to speak with your attorney to determine what grounds would need to be established that would allow such an action. You could always pay it off, but that would come with costs. I can't give you legal advice, and only an attorney who has reviewed all of your documentation can advise you whether they think you have legal grounds for such an action (and I can't tell you what the legal costs would be). As I stated, I can't advise you legally, but I would advise you on behalf of the loan to verify all your documents and request that the lender provide the explanation you need. The second trust deed is required for the HUD program, so if you want the loan, you will have two Notes and two Deeds/Mortgages with any lender.

Hello Gene, Medicaid and other needs-based programs have no effect on the reverse mortgage, so this is not a question for a reverse mortgage lender. What you may or may not owe Medicaid or other programs depends on the program and its terms. I cannot tell you what you may or may not need to pay back on any specific programs, and even Medicaid itself can differ from state to state as the states administer their own Medicaid programs. Reverse mortgage lenders do not work with Medicaid recovery, and the internet is full of information about when it can begin and when the state can and cannot recover (both against the estate and the individuals). I would not even try to advise you in this area. You should seek the advice of an elder care attorney in your state to ensure you receive the best information available.

Hello Sean, The only time there could be limitations on this type of transaction would be if the loan was used for cash out to your mother-in-law and was less than 12 months old. Since it was several years ago, assuming she and the home qualify under HUD guidelines, obtaining a reverse mortgage would not be a problem, but the loan would need to be paid in full at the closing. You cannot leave the loan on the title and record the reverse mortgage in a junior lien or a secondary loan position. One of the things you would need to keep in mind is that if there are any payments due under that Note and Deed of Trust/Mortgage, the lender will require the documentation to see that mom paid those payments in a timely manner.

Hi Kimberly,The second trust deed is in place to cover any advances that HUD must make on your behalf (if any). If none are made, nothing is owed on that portion of the loan. This can occur if HUD must advance funds on your behalf because you failed to make required taxes or insurance payments. They are forced to advance funds because the loan balance rose above a certain point, the loan was assigned back to HUD, or the lender went out of business, and HUD had to step in and take over, etc. But your total outstanding balance for your reverse mortgage would continue to show on your monthly statement (there is no separate statement for the second portion of the loan, should this occur).

Hello Joel,I am not concerned about you questioning my knowledge or expertise, and I won't refer you to any HUD website but instead to the loan documents themselves. In the case of divorce, one spouse leaving home happens quite often, and lenders do not call the loans. Once you close a loan, your loan is dictated by the terms you agreed to in your loan documents, so your best reference is your Note and Deed of Trust or Mortgage. In other words, even if HUD changes its rules later, it cannot come back and arbitrarily enforce stricter rules than those you agreed to when you closed your loan (although it can ease up on restrictions later and has done so in the past.)You will receive a sample set of documents at application, so you will have ample opportunity to be sure they contain all the provisions acceptable to you before your closing date. If your loan is already closed, you can pull out your legal docs and review them. If you still are not sure about some verbiage in them and want a legal opinion, you can only get that from an attorney.Having given my full disclaimer, please allow me to tell you where you can find the answer to your question. The legal documents will tell you everything you need to know about the loan terms, the lenders' rights, and your obligations. The reverse mortgage loan documents specifically spell out when the loan may require immediate payment in full, as I stated in the Note and Deed of Trust or Mortgage (depending on whether your state is a Deed of Trust or Mortgage state).Under "Other Grounds" on the Note, to require immediate payment in full under the Sale provisions, (B) Sale, states: "Lender may require immediate payment in full of all outstanding principal and accrued interest if a borrower conveys all of his or her title to the Property and no other Borrower retains title to the Property in fee simple or on a leasehold interest as set forth in 24 CFR 206.45(a). A deferral of due and payable status is not permitted when a Lender requires immediate payment under this paragraph." This is the reference that you can add someone to the title provided that you are also still on the title and that only one original borrower needs to still be on the title.It does not state that they can call the loan if they transfer any portion of the title or that all borrowers must remain on title.Then under (C) Other Grounds: Lender may require immediate payment in full of all outstanding principal and interest upon approval of the Secretary, If:

The Property ceases to be the Principal Residence of a Borrower for reasons other than death, and the property is not the Principal Residence of at least one other Borrower...

This statement indicates that if the home is not occupied by an original borrower for reasons other than death and at least one other borrower does not occupy it, then the lender may call the loan due and payable. In your case, if the separating spouse leaves but at least one other borrower still occupies the home, the grounds are not met to call the loan. However, if there was no other borrower (operative word is "borrower", not just spouse or family member - must Hello Joel,I am not concerned about you questioning my knowledge or expertise, and I won't refer you to any HUD website but instead to the loan documents themselves. In the case of divorce, one spouse leaving home happens quite often, and lenders do not call the loans. Once you close a loan, your loan is dictated by the terms you agreed to in your loan documents, so your best reference is your Note and Deed of Trust or Mortgage. In other words, even if HUD changes its rules later, it cannot come back and arbitrarily enforce stricter rules than those you agreed to when you closed your loan (although it can ease up on restrictions later and has done so in the past.). You will receive a sample set of documents at application, so you will have ample opportunity to be sure they contain all the provisions acceptable to you before your closing date. If your loan is already closed, you can pull out your legal docs and review them. If you still are not sure about some verbiage in them and want a legal opinion, you can only get that from an attorney.Having given my full disclaimer, please allow me to tell you where you can find the answer to your question. The legal documents will tell you everything you need to know about the loan terms, the lenders' rights, and your obligations. The reverse mortgage loan documents specifically spell out when the loan may require immediate payment in full, as I stated in the Note and Deed of Trust or Mortgage (depending on whether your state is a Deed of Trust or Mortgage state).Under "Other Grounds" on the Note, to require immediate payment in full under the Sale provisions, (B) Sale, states: "Lender may require immediate payment in full of all outstanding principal and accrued interest if a borrower conveys all of his or her title to the Property and no other Borrower retains title to the Property in fee simple or on a leasehold interest as set forth in 24 CFR 206.45(a). A deferral of due and payable status is not permitted when a Lender requires immediate payment under this paragraph." This is the reference that you can add someone to the title provided that you are also still on the title and that only one original borrower needs to still be on the title. It does not state that they can call the loan if they transfer any portion of the title or that all borrowers must remain on title.Then under (C) Other Grounds: Lender may require immediate payment in full of all outstanding principal and interest upon approval of the Secretary, If:The Property ceases to be the Principal Residence of a Borrower for reasons other than death, and the property is not the Principal Residence of at least one other Borrower...This statement indicates that if the home is not occupied by an original borrower for reasons other than death and at least one other borrower does not occupy it, then the lender may call the loan due and payable. In your case, if the separating spouse leaves but at least one other borrower still occupies the home, the grounds are not met to call the loan. However, if there was no other borrower (operative word is "borrower", not just spouse or family member - must be a borrower on the loan) occupying the property and it was being occupied by other family members or being used as a rental, then this provision could be used to call the loan due and payable.The Deed of Trust contains similar language under 10. Grounds for Acceleration of Debt. It again spells out that the borrower must transfer all interest to the property and that the property is not the principal residence of at least one surviving borrower. My "advice" to anyone is to read your loan documents and always abide by the provisions. According to the documents (not me or some website), the lender may initiate a call of the loan if you transfer all your interest (title) to the property and there is not at least one original borrower not still on title to the property. They can also call the loan due and payable only if at least one of the original borrowers on the loan no longer lives in the property as their current residence (all borrowers are not required to always live in the property for the life of the loan). This is just a lender's explanation of the legal documents. If you would also like a legal opinion, you would need to consult with an attorney. a borrower on the loan) occupying the property and it was being occupied by other family members or being used as a rental, then this provision could be used to call the loan due and payable.The Deed of Trust contains similar language under 10. Grounds for Acceleration of Debt. It again spells out that the borrower must transfer all interest to the property and that the property is not the principal residence of at least one surviving borrower. My "advice" to anyone is to read your loan documents and always abide by the provisions. According to the documents (not me or some website), the lender may initiate a call of the loan if you transfer all your interest (title) to the property and there is not at least one original borrower not still on title to the property. They can also call the loan due and payable only if at least one of the original borrowers on the loan no longer lives in the property as their current residence (all borrowers are not required to always live in the property for the life of the loan). This is just a lender's explanation of the legal documents. If you would also like a legal opinion, you would need to consult with an attorney.

Hello Becky, Every reverse mortgage has both a first and second mortgage so that HUD is protected with the second mortgage for any funds that they must advance (if any) on the loan. I can only go by the loans I have personally been involved with during the payoff and NOVAD was not involved at all with a release, the servicer was paid and both liens were released at that time. I cannot think of a reason why the second loan would be serviced by a different servicer than the servicer who serviced the first. If the second had been transferred to NOVAD it would stand to reason the First had been transferred to them as well and so there would be no lag time. The only Beneficiary's Demand for payment in full I have seen have included all amounts required to pay both liens and there would be no emailing of a lien release, etc. to a second location after the first was paid in full. NOVAD would release the lien as soon as the loan/lien was paid, and it would seem to me that it would be very strange that it would take coordination between two servicers to pay off the lien(s). I am sorry, I do not want to give you the wrong information. I have not heard of the loans being separated and one servicer servicing one of the two liens and another (NOVAD) servicing the other lien, but I don't want to say it could not possible happen just because I haven't heard of it (it would not be the first time something changed that I didn't hear about). If NOVAD is just waiting to hear of a lien release and HUD has never forwarded any funds on the loan, it would stand to reason that they could release the second lien immediately upon confirmation of the lender's receipt of the payoff and the recording of the lien reconveyance but that is just odd. I would suggest you contact whoever released the first and ask them.

Hello Sharron, To be able to obtain a reverse mortgage, mom has to be the owner of the property. I cannot comment on the Deed that mom and Dad filed in 1977 but I can only guess that you and your sister Deeded the property back to mom in 2010 to enable her to get the reverse mortgage. I would verify what documents you signed at that time and the title to the home at this time. Any prior Deeds would not be "Null and Void" per se, but would be replaced by any subsequent Deeds filed after that time. I believe you probably signed a Deed to put the home back into mom's name in 2010 or she would not have been able to get a loan as she would not have been the owner of the property. Mom can sign a Deed now from her to herself and you (or herself and both you and your sister) now and this would not adversely affect the reverse mortgage. She can add anyone to title as long as she also remains on title as well and continues to live in the home as her primary residence. But in 2010 if you were not living in the home and old enough to also be a borrower on a reverse mortgage, you would not have been able to remain on title. You could have been added back to title at any time as long as mom was still on title with you and this may have already been done, but you may want to verify. I would also have mom sign a letter to the lender which allows them to speak to you and you to them on all matters relating to the loan in case you ever need to contact them on mom's behalf regarding the loan later.

Hello Melody, The Deeds and Mortgages for the loans are recorded instruments but that does not mean that the loan was not sold since the time it was first closed and recorded or was not assigned to HUD. You can certainly check the recorded documents and start there. Even if that lender no longer owns the loan, they may be able to tell you where it went after they sold it. If you are looking for the lender on a loan for a relative, I would suggest you try to find their statements and call the number of the servicer listed on the statement. If you are referring to a loan that has since been closed and you are a party interested in the property, I think the only way to purchase would be through the agent listing the REO for the lender or HUD.

Hello John, There is no prohibition which would prevent you from obtaining any other financing after your loan closes. Having said that, you may find it hard to locate a lender who is willing to go into a junior lien position behind a loan with no termination date (other than you moving out or passing) and on which the balance can continue to rise if you choose to make no payments. But there is nothing in the reverse mortgage that would prevent it if you do have a lender willing to place the loan.

Hello Barbara, If you are also 62 or over and live in the property, you can be added to title and the three of you can get the reverse mortgage in all three of your names. The benefit will be calculated based on the date of birth of the youngest borrower (you) and the loan will remain in effect until the last borrower on the loan is no longer living in the property.If you are not yet 62 or you do not reside in the property as your full time residence, your parents can still put you on title so that you will be on title when the time comes that you must work on the disposition of the home, but you would not be on the loan so you would need to either refinance the loan or sell the house at that time. You would be considered an "ineligible non-borrowing owner" and would still have to attend counseling and sign some of the documents to certify that you knew what rights you do and do not have not being on the loan under those circumstances. Your parents can always add you to title after the loan closes as well if you are not already on title. If you choose to be added after the loan closes, I would suggest that you have a title company or title attorney assist you with the title change to be sure you do not incur a taxable event (which can happen if the filing is done incorrectly). And I would also suggest that your parents write a letter to the mortgage company immediately giving them and you permission to communicate together on all things related to the loan. This way, when the time comes, they already have authorization to speak with you on your parents' behalf regarding the loan. This is all advice relating to the loan itself. For heirship issues, I strongly recommend a trip to an estate attorney. The attorney can help you be sure that the ownership of the property passes quickly and with the least possible issues. I cannot give you legal advice and I can tell you that many times heirs put themselves into a bind because they are not prepared and spend entirely too much time just trying to figure out how to transfer the title of the property or probate issues, etc. An attorney can help you with all that planning. It may be that adding you to title now will take care of that, it may not. Only a knowledgeable attorney can tell you the best method for the laws in the state/area where the property is located and based on your individual circumstances.

Hello Pat, The reverse mortgage is like any other loan. You cannot place a mortgage loan on a property unless all owners of the property agree to the terms of the loan. The lender relies on the property as the security for the loan. If there are other owners who do not agree to the terms of the security instrument (the Deed of Trust or Mortgage depending on where you live), the lender would not be able to enforce the terms of that instrument on just a portion of the property.

Hello Ramona, I cannot answer your question regarding the legal requirements for closings in New York, we are not licensed there, and I could not offer a legal opinion. About the loan amount, are you referring to the Note amount that appears on the documents? Reverse mortgages have no payments and the balance rises with the accrued interest. Therefore, HUD requires the face amount of the Note to be 1.5 times the value of the home or 1.5 times the maximum lending limit, whichever is less if the state requires an amount on the documents (which most do). The borrower still only owes only what they borrow and the interest that accrues on that amount though and the loan can be repaid at any time without penalty. For instance, if the 82-year-old in question owns a home worth $300,000 and the reverse mortgage has a maximum Principal Limit of $165,000 but the owner only borrows $50,000 of that amount, even though the loan documents will have a face amount of $450,000, the borrower only owes $50,000 plus any accrued interest when the loan is repaid. The higher face amount protects lenders and HUD should that same borrower takes the entire $165,000 at closing (for instance to pay off an existing mortgage), live in the property for 20 years without making a payment while accruing interest and subsequently have a much higher balance later. But in the end, she still only owes what she borrowed plus any accrued interest (plus repayment of funds the lender or HUD must advance on her behalf, if any, for taxes or insurance that she does not pay).

Hi Barbara,I'm not 100% sure of your concerns but you do own the property and all you have to do is look at your monthly statement to see what your balance on the loan is, compare that to your current value and then you know what your equity in the home is. You can make whatever decisions you need to make as far as staying or moving, but the second Deed of Trust does not diminish your ownership. You still own the home and you can make your plans to stay or sell the home after you determine your equity after a sale, the cost to live elsewhere and the fact that you do not HAVE to move, it is entirely your call.