Hello ARLO, My father passed away in October 2018.  He had a live-in caretaker for several years.  I decided to sell the house in California, while the caretaker is occupying the home to keep the property safe and away from squatters and facilitate the viewing.  One offer from a buyer fell through, and the caretaker approached my agent wanting to put in an offer Celink has been working on the short sale approval on his offer for 2 months, with very little communication and feedback.  The appraisal from the lender was already done in September and is supposedly waiting for HUD/Owner approval.  Meanwhile, the trustee sale is scheduled for January 3rd, 2020.  This past Friday, Celink said that the “client,” whom I assume is HUD or whoever bought the note, that IF the sale/escrow can be completed by December 30th, 2019, they are ok with approving.  Being a holiday month, it is unlikely that the buyer/caretaker will be able to open escrow and close by December 30th.  If the property is sold at auction on January 3rd.  How much time must the buyer (who has been a long-time resident) vacate the home?  He wants to make sure that he will have enough time to find another place to live and take his personal property acquired over the years.  He is also a senior with mobility challenges.  If it forecloses on the 3rd, what is the time frame for him to vacate?  Also, if no one bids on the trustee sale, does he have a longer time period to move out?  He is apprehensive that if his escrow is delayed, he will have even less time to find something suitable.  Would Celink postpone the trustee sale beyond the 3rd?  Thank you, -Emmy

Hello Emmy,

Regarding the timeframes and rights of a third party vacating the property, you would need to consult with an attorney in the area if the reverse mortgage ends in a foreclosure sale.

That would be a legal issue separate from the reverse mortgage, and many factors can play a role in eviction that I cannot answer for you.  But about the timing of the foreclosure sale, the lender can postpone a foreclosure sale if they choose.

Celink is the lender’s/HUD’s servicer, acting on the lender’s behalf; they would not make that decision independently.  That is why there are delays at times.  They do need to obtain approvals for specific actions.

But suppose the buyer is close to closing at the end of the month.  In that case, he should communicate with Celink. While I cannot commit anything to them, I am pretty confident they would be willing to grant a small extension to allow the loan to close.

It would be an excellent idea for him to give Celink regular updates as the loan progresses so there is no question of his intent or ability to qualify.  You need to remember that a suitable lender CAN close a loan between now and December 30th if the borrower qualifies (it is a tight timeframe with the holidays, but it is possible).

If the loan is approved and just a day or two away from closing at the end of the month, their priority is repaying the loan, which is what they would push for. 

If, however, they do not see a close date in sight (you get to December 30th, 2019, and there is no loan approval yet), the lender or HUD must decide whether to wait for a close (that may never come) or proceed with the foreclosure.

Remember, it’s already been over a year since the borrower left the home.  HUD is still incurring losses on the loan since interest continues to accrue, and sooner or later, they must cut their losses.

If the caretaker is purchasing the property, he must work diligently on closing the loan.  If he thinks he cannot close a loan to purchase, he should be making that assessment now.

I do not know what the law will allow for eviction times after the foreclosure is completed if he waits until then to move.  Still, I am aware that there is no stated forbearance period for occupants of properties once a lender has foreclosed.  The Trustee’s Deed has granted title to the lender.

Unless there is some legal reason to extend the time, things will move quickly from that point.  Again, your best option is to consult an attorney for legal advice to ensure the laws and rights in this case.

Loan Maturity FAQs


What happens when the reverse mortgage owner dies?

The heirs have the option to pay off the loan (at the lower of the amount owed or 95% of the current market value of the home) and keep the home, sell the home, and keep the proceeds or let the lender take the home and owe nothing to the lender.

Can heirs walk away from reverse mortgages?

Yes, heirs can walk away from a reverse mortgaged home.  The loan is non-recourse, meaning the lender’s only security is the property.  We encourage all heirs to compare the balance owed on the borrowers’ most recent statement to the probable value expressed by a local real estate professional to ensure they are staying within equity that belongs to them or their family’s estate.

Can you buy back a house that has a reverse mortgage?

You do not need to repurchase the home.  The reverse mortgage is a loan just like any other loan.  The loan may be repaid at any time without penalty, and the home remains the property of the owner or their heirs.

How long does it take to foreclose on a house with a reverse mortgage?

The foreclosure timeframe for a reverse mortgage is the same once the Notice of Default has been filed, as with any other loan as prescribed by local laws.  The actual time it takes depends on the state where the property is located.  However, it can take as little as 150 – 180 days in a Trust Deed state from filing to over a year in a judicial foreclosure state that must go through a court foreclosure.  Any individual, borrowers, or their heirs facing a foreclosure action should seek legal assistance to determine the foreclosure laws in their area and their rights and obligations under the law.

How long can a caretaker stay after the owner dies with a reverse mortgage?

This is a tricky question to answer.  If the owner has heirs who want to sell the home or move in, they could begin an eviction process almost immediately.  Then it would be up to the individual laws in your area to determine your rights to remain before you must vacate.  If no heirs come forward to claim the property, the lender would only be able to remove an individual from the property once they owned the home, and that could only be completed after a foreclosure action which could take 5 months or longer.  At any rate, you need to realize that, eventually, there will be a new owner.  Unless they keep the home as a rental and you can decide with the new owner to continue to rent from them, you will need to move.  Let’s start planning for that eventuality early on.

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