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Reverse Mortgage with a Trust — Living Trust & Family Trust

By Michael G. Branson

CEO · 45 yrs in mortgage banking

Edited By Cliff Auerswald

President · All Reverse Mortgage Inc.

Updated Aug 31, 2022 ⏱ 6 min read ✓ Fact Checked HUD-Lender #26031-0007 104 comments

I have the home in a family trust. I am unmarried but have lived with my “wife” for years. She inherits the home by last will. Do we qualify for a reverse mortgage?

The short answer is yes. You can have your home in a family trust with a reverse mortgage. Firstly, as a lender, we only get so much information. Then, we rely on the title and affidavits we receive when originating the loan.

For example, we would do a title search and see that the current title is in the name of your trust, and we would get a copy of that trust. We would have a copy of your application stating you were unmarried.

Including Your Partner in a Reverse Mortgage

With reverse mortgages, there are forms that adult property occupants must sign stating that they have no ownership interest in the home and are aware of the transaction. With that documentation, there is no problem doing a reverse mortgage loan for someone with your circumstances.

Who inherits the house is of no consequence in making the loan. If she has a current ownership interest, she would have to be considered in the loan, and the title would have to reflect her interest.

Suppose you want her also to be included in the loan. As long as she is 62 or older, you can change the title to include her, and she can also be included on the reverse mortgage, even though she is not married to you.

If she is not yet 62, she cannot be a non-borrowing spouse because she does not meet the qualifications (under 62 but married to the reverse mortgage borrower when the loan originated).

Under the parameters you have described, you could obtain the loan in your name alone at this time since you are not married. You get sole ownership of the property, and nothing would prevent her from inheriting the home after you pass.

IF MY SPOUSE IS NOT ON TITLE, WILL SHE BE UNABLE TO STAY IN OUR HOME AFTER MY DEATH?

Trusts & Non-Borrowing Spouses

Unless she is on the title or is a bona fide non-borrowing spouse, the loan becomes due when the last borrower or non-borrowing spouse at the time the loan is obtained permanently leaves home.

Under your scenario, she owns the home when you leave it to her, and nothing says she has to leave the property. Still, if she does not have the money to repay the obligation, she would have to sell the home to pay off the loan if she was not on the title when the loan was taken and was not a non-borrowing spouse at the time.

We constantly coach borrowers to understand the options before they close the loan, not after the time comes when a loved one has passed, and now they have to scramble.

Your proactive research will help you greatly so that your significant other is not trying to figure this all out at a time in her life when things are difficult enough.

As you stated, the options are to be 62 or over and on the title when the loan closes, be a non-borrowing spouse, or make other arrangements in advance if you want to proceed with the reverse mortgage.

Some of the other arrangements that non-borrowing spouses have told us about in the past include a life insurance policy in place to pay off the mortgage at the passing of the older spouse, a second home owned by the couple that the non-borrowing spouse intended to move to at that time, or family that the non-borrowing spouse had plans to move in with or closer to upon the passing of the older spouse and plans to sell the home at that time anyway.

Absent a clear plan in advance, finding out after a loved one has passed that you now have an obligation that must be repaid with no means to repay it, forcing a move, is a terrible way to proceed.

You need to decide now if you want to take the steps outlined above to protect your significant other so that she can remain in the home if that is your and her desire or determine that the reverse mortgage does not fit with your plans.

Have Questions About Trusts and Reverse Mortgages? Whether your home is in a living trust, family trust, or you need guidance on non-borrowing spouse protections, we can help. Call All Reverse Mortgage, Inc. (ARLO™) at (800) 565-1722 or get your free consultation.

Trust FAQs

Can I put my reverse mortgage in a trust?

Yes. HUD allows borrowers to place their reverse mortgages into approved trusts, and fortunately, most trusts written these days comply with HUD requirements. However, you want to ensure that your trust meets the HUD requirements before you change the title. For this reason, I always advise borrowers to send their trust to the lender/servicer for approval before you record the Deed transferring title to the trust. If you transfer title to a trust that cannot be approved, it creates a default that is typically easy to cure (you would need to transfer title back out of the non-approved trust), but why take the chance? It’s very easy to send the trust to the servicing department, let them review it for compliance, and then transfer the title to the trust after you get the approval. Do not take any chances. If you need an amendment to the trust in order for it to meet HUD requirements, it is easy for your attorney to take care of it, and you would not need to keep re-recording documents, saving yourself time and money as well.

What are my options if my trust fails to meet the guidelines to obtain a reverse mortgage?

If your trust is determined not to meet the guidelines, you may have some options depending on the trust itself and how it was set up. You can take the property out of the trust to yourself as an individual or amend the trust to ensure that it meets guidelines.

Can a property be taken out of trust before or after I obtain a reverse mortgage?

Yes. If you want to get a reverse mortgage and no longer want the property vested in your trust, you may take the property out of the trust as long as you have the authority to do so. You should consult your tax professional to confirm if doing so would result in a tax liability. Once the reverse mortgage has closed, you can take the title out of the trust, but only by obtaining approval from the mortgage company first. Guidelines require that you can only transfer ownership of your property once the reverse mortgage has been taken out if you get the sign-off beforehand. An unauthorized title transfer can result in the reverse mortgage being called due and payable.

Can I amend my trust after I get a reverse mortgage?

Yes, but you should let the lender know first. When you obtain a reverse mortgage loan for a property vested in a trust, you must agree to notify the lender of specific changes related to the trust. Those changes include the death of the beneficiary, any change of occupancy by the beneficiary, any conveyance of the property, or any transfer of the beneficiary’s interest in the property.

Can I obtain a reverse mortgage if I am a successor beneficiary of a trust?

No. To obtain a reverse mortgage on a property vested in a trust, you must be a current beneficiary of the trust.

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104 Comments on this Article

Sherry
May 4th, 2026

My mom and her significant other are co-borrowers on a reverse mortgage they have had for 15 years. I also live in the home, but I am not named on the title or the loan. I am named as the beneficiary, and my mom would like to make me power of attorney over all her finances. My mom and her significant other are going their separate ways, and he would like off the loan as well as off the title to the house. She would like to remain in the home on the reverse mortgage without any changes. Is this possible? Also, is it better for me to remain as an heir to the property rather than adding my name to the title? And how long do loan companies allow an heir to occupy the home after the borrower has passed? Thank you in advance for sharing your knowledge!
Reply to Sherry
- Michael Branson
  May 4th, 2026
  
  Hello Sherry,
  I have a mix of answers for you, but in the long run, it's all pretty good news. Let me answer your questions in the order you asked them, since there are quite a few.
  First, your mother can give you her power of attorney (POA) at any time, and it does not affect the loan. Once all the changes are done, I suggest your mom send a copy of the POA to the lender along with a letter of authorization. The letter should authorize you to talk to the lender about the loan and authorize the lender to talk to you about all matters relating to your mom's loan as well. That way, if you ever need to help her with things, the lender already has her authorization on file.
  The next question is a bit trickier. The lender cannot just take a borrower off the loan. If the borrowers go through a divorce or legal separation, he can leave the property and she can remain in the home with no problem, as long as she is on the loan. The loan is non-recourse anyway, so he has no liability to worry about, but he cannot get another reverse mortgage while he still has this one. The only way to remove him from the loan is for your mom to refinance the loan in her name alone after he signs a Grant Deed removing his name from title.
  Your mom can add you to title at any time with no ill effect on the reverse mortgage. The loan allows her to add anyone she wishes to title, as long as she is still on title herself, continues to live in the home as her primary residence, pays all property charges on time (taxes, insurance, and HOA dues, if any), and maintains the home in a reasonable manner. Some people find this makes things easier when the time comes to decide whether to sell, refinance, or otherwise pay the loan off. I suggest you talk to a trusted financial advisor before making that decision, but just know you can do it under the terms of the reverse mortgage.
  The lender would be very pleased if they were able to discover the passing of the borrower within a few short months, contact the heir to determine the heir's plans, and have the loan paid off within 6 months of that notification. The truth is, it seldom goes that smoothly. It all depends on when the lender receives notification, what your plans are, and how quickly the lender's servicing department can get all their notices out and then perform the necessary HUD inspections.
  If you want to sell the home, it is to your benefit to do so as quickly as possible, since interest continues to accrue on the loan, and the sooner you sell, the more equity you retain. If you do not intend to sell or keep the home and are going to let the lender take it to repay the loan, you do not have to leave until the lender evicts you after the foreclosure proceeding is complete. Again, depending on where the home is located and how on the ball the servicer is, this can take 8 months to a year or more. Some lenders take even longer, and we have received letters from heirs who stayed in the property for more than 5 years after the borrower passed. However, I would not count on that!
  Reply to Michael
Diana
January 24th, 2025

Hello Michael,
I see that it is possible for someone to take out a reverse mortgage on a home that is in a living trust, but I have some questions about the specific rules regarding this.
My mother had a home in a living trust, and my understanding was that upon her death, my stepfather would be allowed to live in the home until either his passing or his decision to sell it. If he chose to sell, the remaining proceeds would be distributed among the beneficiaries. In the event of his death, one or more of the beneficiaries could live in the home as long as the others agreed. Otherwise, the house would be sold, and the proceeds would be divided among the beneficiaries.
All of this seemed clear - until my stepfather took out a reverse mortgage without notifying any of us. I was under the impression that no changes could be made to the trust without the permission of all beneficiaries.
My question is: Can a reverse mortgage be taken out on a home that is held in a trust?
Reply to Diana
- Michael Branson
  February 11th, 2025
  Hello Diana,
  There are two separate issues here. First, can a property held in a trust be used to secure a reverse mortgage? The answer is yes, as long as the trust allows for it and meets HUD's requirements. HUD does not impose specific requirements regarding the rights of future beneficiaries - only that the borrower has the legal right to obtain a reverse mortgage under the terms of the trust. It sounds like your stepfather did not need consent from other beneficiaries to take out the loan. Before approving any reverse mortgage, lenders obtain a legal opinion to ensure that the trust meets all HUD requirements and that the borrower has the authority to secure the loan. I would be very surprised if this trust did not undergo the same legal review.
  Second, does taking out a reverse mortgage change the terms of the trust? Not necessarily. Trusts have multiple parties, and it's important to understand the specific rights and conditions outlined in the trust agreement. I recommend consulting an estate attorney to review the document and clarify the rights of all beneficiaries.
  Regarding what happens now: Once the borrower (your stepfather) either passes away or permanently moves out of the home (e.g., into assisted living), the loan becomes due and payable. At that point, the beneficiaries must either:
  If none of these options are taken, the lender will initiate foreclosure proceedings to recover the loan balance. Unfortunately, the reverse mortgage cannot simply remain in place for the beneficiaries to continue living in the home without repayment.
  Reply to Michael
Janie M.
December 13th, 2024

My father in law has lived in our home for over 40 years. My husband, our four children, and I also live in the home. Years ago, my father-in-law obtained a reverse mortgage on the home.
We are currently working on his trust and estate planning, but we fear that because my husband (the beneficiary) is not 62 or near that age, the property may not be eligible to be transferred into a living trust per HUD requirements.
My question is, should my father in law be the beneficiary, and my husband the contingent beneficiary?
Reply to Janie
- Michael Branson
  December 13th, 2024
  
  Hello Janie,
  You are correct that the trust you described would not meet HUD requirements for your father-in-law's reverse mortgage. Transferring title to a trust in which your father-in-law is not the beneficiary would be considered a transfer of title, which could result in the lender calling the loan due and payable.
  Fortunately, you do not need to change the title before submitting the trust to the lender for approval. We always recommend this step to ensure that the trust complies with HUD's requirements before making any changes.
  A property can be placed in a trust, but the trust must be approved to avoid any risk of the loan being called due. Since there could be other reasons a trust might not meet HUD guidelines beyond just the beneficiary designation, it is prudent to have the trust reviewed by the lender before recording the deed that transfers the title from individual ownership to the trust.
  By having the trust approved in advance, you can address any amendments or issues before changing the title. If the trust needs modifications or cannot be adjusted to meet HUD requirements, you will know this beforehand and can avoid complications.
  In your case, designating your father-in-law as the beneficiary and your husband as the contingent beneficiary would likely satisfy HUD requirements. However, it's essential to confirm this with the lender to ensure the trust fully complies.
  Reply to Michael
Mel B.
August 31st, 2024

I purchased my home with a reverse mortgage through a purchase program. My home is in my trust. Can I put my son on the deed? He is my beneficiary in my trust and lives with me.
Reply to Mel
- Michael Branson
  August 31st, 2024
  
  Hello Mel,
  The answer to this question depends on the type of reverse mortgage you obtained. If you used the HUD HECM program, then yes, you can add your son to the title as long as you are also on the title and still living in the home as your primary residence.
  If you used one of the private or proprietary programs available, often referred to as jumbo loans due to your loan amount or property value exceeding HECM program limits, you will need to check your loan documents. Not all private programs have the same provisions, and your legal documents will dictate the terms regarding a transfer of ownership.
  Even if you remain on the title, adding someone else constitutes a change in ownership, so it's crucial to ensure this is allowed by your legal documents, especially if you have a private reverse mortgage. The current HECM documents specifically allow for the addition of another person under the circumstances I described, but you cannot rely on this if you don't have a HUD HECM loan. Also, keep in mind that if you're reading this in the future, HUD may have updated their policies, potentially requiring lenders to revise their legal documents. Borrowers should always review their Note and Deed of Trust/Mortgage (depending on what is used in your state) to ensure this provision is included. While your originator cannot provide legal advice, they can help point out this provision in the legal documents for you.
  Reply to Michael
Nancy H.
August 6th, 2024

Can I have a will if I have a reverse mortgage, and what is a third party?
Reply to Nancy
- Michael Branson
  August 6th, 2024
  
  Hello Nancy,
  Of course, you can have a will. A will is simply your final directive regarding how your estate and affairs should be settled. It outlines what should be done with your worldly possessions, medical directives, and other wishes. A reverse mortgage does not affect your estate, trust, or will.
  A third party is anyone who is not directly involved in a transaction. For example, if you and your sister agree to something and your brother is not part of that agreement, he is considered a third party.
  Reply to Michael
Bill B.
October 11th, 2023

I am the trustee of a special needs trust with a sole beneficiary who is 70 years old. The trust owns a property without any liens and the property and structure have substantial value. Assuming the special needs trust is HUD compliant, can a reverse mortgage obtained while keeping the property title in the name of the special needs trust? This is necessary to preserve the benefits being received.
Reply to Bill
- Michael Branson
  October 11th, 2023
  
  Hello Bill,
  
  You can do the reverse mortgage in the name of the trust if the state does not have a problem with it (for example, you cannot do this in the state of Texas). The Power of Attorney can act for the beneficiary who is the eligible reverse mortgage recipient if the trust itself allows the POA to act on behalf of the trustee for the trust and the funds from the reverse mortgage must go into an account of the borrower, not you as the trustee. Yes, the trust must meet HUD eligibility requirements, and the beneficiary of the trust must be the special needs borrower and no one else (cannot include you as the POA).
  Reply to Michael
Shane A.
September 29th, 2023

Hi Arlo,
My ex-husband is 81 and has a reverse mortgage on his home. Aside from his SS monthly payments, he has no income or assets. He's remaining in this home with w/our oldest daughter, her husband, and their two kids. All the home finances fall upon her now. Her father recently did a revocable trust on the house. I don't know what this means, but I'm concerned that my daughter must pay the reverse mortgage when he dies. In a situation like this, does a revocable trust mean she keeps the house and doesn't have to repay the loan? Does the reversible trust fall upon someone else (the bank?) to own the home? It's very confusing, but I hope you can shed light on this.
Reply to Shane
- Michael Branson
  September 29th, 2023
  
  Hello Shane,
  
  The trust doesn't change the terms of the reverse mortgage at all. The loan becomes due and payable after the borrower passes or, for any other reason, no longer lives in the home as their primary residence (i.e., dies or permanently moves to an assisted living facility). Ownership of the home is determined by your ex-husband. If he passes, did he set it up in the trust so that the home passes to your daughter alone or to her and other siblings? Because the lender does not make this determination, your ex-husband, as the owner of the home, now does, but that loan becomes due and payable at that time, so the family and the future owner need to have a plan in effect for when that time comes.
  
  For example, if your daughter is the sole heir, she can put the title in her name and refinance the loan with a new loan, then continue to live in the house under the new financing terms. If she cannot obtain financing, she may need to sell the home to retain the equity in the property. If she is not the sole heir, she may need to work with the other heirs to devise a plan for the property at that time. Perhaps they will need to sell the home so that the proceeds may be split among the siblings, or she may need to find a way to buy out their interest. Whatever she plans to do, now is the best time to discuss it and make plans because if she waits until after her father passes, she will have time to act, but that time is not limitless. If she or she and any other heirs wait until the clock starts ticking and only then begin to explore their options and agree on a plan, it could take longer than the lender is willing to wait if their actions start to drag out, which can happen if they are not prepared.
  
  The trust lays out the rules, so to speak, of who is empowered to act on behalf of the estate and the assets in the trust (which presumably will include the house). It doesn't give your daughter any more or fewer rights about the reverse mortgage payoff, but it can make things better for the family since it will outline for the family what is to happen with the estate of your ex-husband, who will be the executor (the person in charge of the estate) and also may make it easier for them to act on his wishes. There may or may not still be a requirement for a probate through the court so I would have them verify that with the attorney handling the estate planning (will and trust) and also have your ex-husband give the lender a letter now authorizing the lender to work with your daughter on all matters related to the reverse mortgage so that they do not delay correspondence with her later because they have no authority to speak to her.
  
  After that, it will be a matter of what they want to do with the property and what they can do with the property after your ex-husband passes, knowing the loan is due and payable and having a plan to act when the time comes.
  Reply to Michael
Slater
September 20th, 2023

I am the trustee of a home in an irrevocable trust. The home is $700k, all equity. I have complete authority to use the house as I see fit with one of the trust wording. I need to take equity from the house to update it and get up to date with household bills. Can I get an equity loan for $200k against the house and use it as collateral?
Reply to Slater
- Michael Branson
  September 20th, 2023
  
  To answer that question, the trust must be reviewed for acceptability under HUD requirements. We need to review your ownership, occupancy, and trust to determine that all would work. In the past, lenders would not allow an irrevocable trust due to the way the loans were sold in the secondary market, but now, if the trust meets HUD guidelines, we can do a reverse mortgage when the property is in an irrevocable trust at this time. Just make sure that you advise the lender from the start so that the circumstances can be verified before you go as far as to order an appraisal and incur more costs.
  Reply to Michael
Slater
September 9th, 2023

I am a trustee of a home in an irrevocable trust. The home is $700k, all equity. I have complete authority to use the house as I see fit with one of the trust wording. I need to take equity from the house to update it and get up to date with household bills. Can I get an equity loan for $200k against the house and use it as collateral?
Reply to Slater
- Michael Branson
  September 9th, 2023
  
  The trust must be reviewed for acceptability under HUD requirements. We need to review your ownership, occupancy, and trust to determine that all would work. Just make sure that you advise the lender from the start so that the circumstances can be verified before you go as far as to order an appraisal and incur more costs.
  Reply to Michael
Lila
July 20th, 2023

I have a reverse mortgage on my home which is in a trust and is to go to my son. We homesteaded it when we bought it in 1974. Does he still have to pay it back when I die? Also, can I take out another mortgage for maintenance on the property?
Reply to Lila
- Michael Branson
  July 20th, 2023
  
  Hello Lila,
  Yes, the loan still becomes due and payable when you pass. Your son can pay it off with other funds, take out a new loan and refinance it, or sell the home and pay it off with the sale proceeds. You are free to take out any other loans you choose. Lenders are sometimes reluctant to lend behind a reverse mortgage because you are not required to pay on the loan. When borrowers make no payments, the balance of the underlying reverse mortgage will grow, and it is hard for a lender in a junior lien position to quantify their actual risk position.
  However, no provisions in the reverse mortgage prohibit another loan, so you are free to seek additional financing. You can also refinance the reverse mortgage to obtain more if the terms are available under the current program parameters.
  Reply to Michael
Dana L.
June 17th, 2023

My parents have had a reverse mortgage since 2008 and are in the process of getting an irrevocable trust. Their lawyer said we must contact the lender and get their approval that the home can be titled in the name of the trust. We emailed the server to find out who the current lender is, and they said it was HUD. We then asked where and to who we should send the trust to be reviewed for approval to make sure it meets all the requirements so that everything would be fine, causing the mortgage to become due and payable. The server responded by saying, "We are the mortgage server only. We or HUD do not approve the trust and do not require or provide any approval for you to put the home into a trust." We're still trying to figure out what to do next. Who should we contact to get written approval that the trust meets all requirements? I appreciate your help ARLO!
Reply to Dana
- Michael Branson
  June 17th, 2023
  
  Hello Dana,
  A response like this is very odd. The servicer is the one who works for HUD and would be the one who issued the Notice of Default for the change in the title if the title change was not acceptable. I suggest that your parents send a copy of the trust to the servicer via registered mail and explain that they intend to move the title into the trust as long as it is acceptable under the terms of the loan documents and request the lender to respond. I would only file the Deed to change the title to the trust once they responded that the trust was acceptable.
  Remember that the servicer may not respond to you if your parents do not already authorize them to talk to you on behalf of the loan, so be sure your parents are signing any correspondence that goes to the lender (and you may want to have a letter signed by them to allow them to speak to you and you to them if you regularly help them with such matters). Their authorization would also come in handy later if they cannot speak for themselves and you need to step in to help (i.e., in the case of death or disability).
  Reply to Michael
Theresa K.
June 1st, 2023

Hi Arlo,
I'm an heir to a HECM home that foreclosed 2 yrs ago. I didn't know I was an heir at the time. I'm just finding out through paperwork left by my deceased parents. My children and grandchildren have been living in the home since before my parents death. There now looking to evict the kids from the house. Now that I've realized I'm named in this Trust, can I do anything to prevent this eviction? Since I'm just finding out about the Trust, do I still have rights to the house? Is there anything at all that can be done? Please help!
Reply to Theresa
- Michael Branson
  June 1st, 2023
  
  Hello Theresa,
  If the loan has already been through foreclosure and the lender has taken title through a foreclosure sale, your question would be a legal matter now. Any recourse you may have would depend on the state foreclosure laws. I am not an attorney and cannot advise you regarding state foreclosure laws or what you could or should do in this case.
  I would not even like to guess what your options are at this point if the foreclosure took place two years ago. That would mean that your parents passed sometime well before that because the lender would only start a foreclosure once they were informed or somehow became aware of their passing.
  Foreclosure is a process that takes time, so this has been ongoing for quite some time. And all this time, your children and grandchildren had not notified you of the foreclosure or anything happening with the house? I don't know if anything can be done now, but I suggest you contact a real estate attorney to discuss your options.
  Reply to Michael
Melinda T.
April 21st, 2023

I have a reversed mortgage can I put it into a revocable trust including the home to protect it from creditors?
Reply to Melinda
- Michael Branson
  April 21st, 2023
  
  Hello Melinda,
  
  The trust must meet HUD requirements but if it does, you absolutely may put the home into a HUD-acceptable trust. My advice is to have the trust reviewed by the lender/servicer before you change the title.
  Most trusts do meet the HUD requirements but if there is anything that needs to be changed, you have plenty of time to have the alterations made or to decide if you still want to change the title before you make any changes to the title that might cause the lender to call the Note due and payable.
  You see, if the trust is ok, nothing would happen if you changed the title to the trust and the lender reviewed it later and all was good. However, if your trust did not meet HUD requirements and you had already changed the title, you would receive a Notice of Default that would require you to resolve the default (change the title back or pay the loan off) and if not resolved, could cause the loan to go into foreclosure.
  All bad outcomes can be avoided just by sending the trust to the lender for approval, then recording a Deed to change the title to the trust after you receive the approval to change title to the trust.
  Reply to Michael
Jerry J.
March 29th, 2023

Hello Arlo,
Our property is in a trust. Would it continue to be under the trust, or would there be any changes? If we were to pass, would the property be transferred to our heirs?
Reply to Jerry
- Michael Branson
  March 29th, 2023
  
  Hello Jerry,
  The trust would need to meet HUD requirements (most do), but then the title would stay in the name of the trust. The only changes would be if something didn't meet the HUD requirements, and then it would be your choice to accept the changes. You still would have the option to cancel the loan or take the property out of the trust, but most attorneys have no issues with the HUD requirements, but that would be entirely up to you and your attorney. The title to the home still passes in accordance with your wishes; the mortgage does not dictate to whom you leave your home.
  You and your heirs must realize that the mortgage becomes due and payable when the last original borrower on the loan permanently leaves the property. This means the title passes following your wishes, but they must either pay the loan off at that time with funds available to them, with new financing if they wish to keep the home or sell the property.
  Reply to Michael
Idoris
March 14th, 2023

Hi Arlo,
My mom has a reverse mortgage and the title is only in her name, she wants to change the title to a trust. What are the HUD parameters for a trust? We do not want to make any mistakes.
Reply to Idoris
- Michael Branson
  March 14th, 2023
  
  Hello Idoris,
  
  I'm not an attorney and cannot advise you on what to put in a Trust but I can tell you that most of the Trusts these days do meet HUD requirements. Most of the HUD requirements are for the protection of the borrowers. The best advice I can give you is to just do two simple things. Firstly, when you speak with your attorney that will prepare the Trust for you, let him/her know that it will need to meet HUD requirements. And secondly, send the Trust to your lender for approval before you move the title of the property into the Trust.
  Once the lender approves the Trust, you can have the Deed recorded to move the title of the home into the Trust but if there are any changes needed to meet HUD requirements, the lender will let you know and you can speak with your attorney to decide if you are ok with the changes or if you would rather make other provisions first. That way, the loan is not in any danger of being called due and payable because of a change of title into an unacceptable Trust while you hammer out your differences.
  Reply to Michael
Kristina L.
February 14th, 2023

Hi Arlo,
My mom who we live with, and help is dragging her feet to get a living trust and has done a reverse mortgage. Before she got the reverse mtg she did a grant deed to my son. She's 79 so if she passes does that grant deed to my son keep the house or what's left from going into probate?
Reply to Kristina
- Michael Branson
  February 14th, 2023
  
  Hello Kristina,
  
  I am sorry but I cannot answer this for you. I am not an attorney and cannot give you legal advice and probate matters are of a legal nature that that can vary from state to state (and have nothing to do with the reverse mortgage). The loan will become due and payable when your mom passes so it would certainly be better to determine what you will and will not be required to do when that time comes now, rather than waiting until then. I can't tell by the way your question is worded if the Deed you reference is from mom to your son or from mom to herself and your son.
  There is a big difference in terms of the reverse mortgage. If the Deed is such that mom is still on title but adds your son, then you do not need to wait to record that Deed assuming the dates are good as far as the reverse mortgage goes. Mom can add anyone else to title at any time if she is also still on title and living in the property as her primary residence and she will follow the terms of the loan.
  But then again, there may be a problem with the timing of the Deed to your son, I cannot tell. When she got the reverse mortgage, she had to attest that there were no other Deeds or pending transactions and if the Deed was already executed but not yet recorded, that Deed may not be valid. If she Deeded the property after the reverse mortgage closed and recorded, the date on the Deed to your son would not be a concern but you still need to worry about whether mom is also still on title to follow the terms of the reverse mortgage.
  But there again, I am not an attorney and I do not know if there are other issues you need to worry about or your concerns about the requirement of probate in your state and under what circumstances (especially if there are other possible heirs). I would advise you that it is well worth the cost of a visit to an estate attorney to determine what the laws in your state stipulate, what you all should do as a family to protect yourselves and to have it resolved and determined in advance so that you are not scrambling after mom has passed and is not available to sign legal documents.
  Reply to Michael
Donald S.
January 31st, 2023

Do we have to specifically include the reverse mortgage in our trust?
Reply to Donald
- Michael Branson
  January 31st, 2023
  
  Hello Donald,
  
  I am not an attorney or a financial advisor, so you really need to speak with one of those individuals to determine what best meets your goals and objectives. From the standpoint of the loan, it only goes into the trust if you want it to be in your trust.
  If you place the title to the property in the name of the trust instead of your names as individuals, that is entirely your call. There may be benefits or ramifications for such an action that I cannot possibly know or advise about, and I would seriously recommend that you discuss this matter with your accountant, your attorney or your financial advisor - whoever advises you on such matters. You can proceed with the loan in or out of a trust but if you choose to close the loan in the name of your trust, the trust will need to be reviewed and it must meet HUD requirements.
  Reply to Michael
Katherine B.
January 19th, 2023

I bought my home on reverse mortgage. Is it required to get a trust account for my heir to be able to sell it?
Reply to Katherine
- Michael Branson
  January 19th, 2023
  
  Hello Katherine,
  
  You do not need put your home in a trust for your heir to be able to sell the property after you pass. I am not saying that it may or may not be the best or easiest thing to do, I am just saying that it will not be a requirement of the reverse mortgage. You should also speak with an estate attorney to see what the best legal way to plan your estate passage would be - both from the tax standpoint and from the ease of any legal requirements such as probation, etc.
  If the attorney thinks it is a good idea to add your heir to title now to avoid delays later, just know that you can add anyone you want to title at any time and the loan will not be called due and payable if you are also still on title and living in the property as your primary residence. If you do add your heir now, your heir would have legal title later and would not be delayed trying to sell the home.
  
  It is very good that you are looking at these options now. It is so much easier to take whatever steps are best for you and your plans/goals now while you are still here and able to make your wishes known and can sign the necessary paperwork. Too often people wait and then heirs must file after the passing of the owner which can cause delays or in the case of more than one possible claim to title, rifts in the family.
  Reply to Michael
SM
December 30th, 2022

My mother's house has a reverse mortgage. I am her child who lives in the home and cares for her. I am not a co-owner, but wish to remain in the house if anything should happen. Can she put it in a trust, living trust and pass the house to me? I am 60 if it matters. I cannot afford to refinance the home. This is in the State of Montana
Reply to SM
- Michael Branson
  December 31st, 2022
  
  It's always a good idea to have the title ready to pass to your chosen heir and one way is to establish a trust. That will help a lot when the owner(s) passes, and the heirs need to take the necessary steps to secure ownership and it's always easier while the original owner(s) is alive and able to sign things and make wishes known.
  However, it will not change the fact that the loan becomes due and payable when the last of the original borrowers on the loan permanently leaves the home (whether by death, to move to assisted living, etc.). The reverse mortgage was never intended to be a multi-generational loan. In other words, it cannot be passed from generation to generation with no repayment and continual interest accrual.
  If you know now that you would not be able to refinance the property to repay the loan (and you can do that at the lesser of the amount owed or 95% of the current value if the amount owed is greater the current value), then realize that you also have the option to sell the home at that time. Knowing your options in advance allows you to plan before the time comes that you need to act so that you are not taken by surprise at a time when you are already dealing with the grief of losing a loved one.
  Reply to Michael
Connie
December 7th, 2022

Hi Arlo,
If you have a reverse mortgage and did a living trust and forgot to send it to the lender, what happens?
Reply to Connie
- Michael Branson
  December 7th, 2022
  
  Hi Connie,
  You should always send a trust to the lender first to be sure that the trust meets HUD requirements because if not, the change in ownership can be a default under the terms of the loan. If your trust meets HUD requirements, there will be no problems so my suggestion would be to send your trust to them and request their approval before they request it from you.
  Just know that if your trust is not acceptable, you would need to make any required amendments or take the property back out of the trust within the timeframe they give you to correct the default (change of ownership to an unapproved and unacceptable trust) or they can initiate default proceedings including calling the Note due and payable followed by foreclosure if the loan is not repaid.
  Chances are good that your trust is fine though so send it to them for review and don't just assume it won't be an issue. The sooner the better to give you time to take any steps you need if there are corrections that need to be made in either the trust or the title to remain in compliance with your loan provisions.
  Reply to Michael
Bonnie
November 14th, 2022

Can a house held in an irrevocable grantors trust obtain a reverse mortgage?
Reply to Bonnie
- Michael Branson
  November 14th, 2022
  
  Hello Bonnie,
  
  That would depend on the trust itself. The only way to know is by having the trust reviewed by a lender who can tell you if the terms meet HUD requirements. If the trust is really complicated, it might even require a legal review, but all can be accomplished before you get very far into the process.
  Reply to Michael
Patricia W.
October 20th, 2022

Hi Arlo,
I currently have a reverse mortgage on my home, and I am contemplating having a Revocable Living Trust drawn up. Can I transfer the reverse mortgage into that Trust?
Reply to Patricia
- Michael Branson
  October 20th, 2022
  
  Hello Patricia,
  
  All Trusts must be approved but luckily, most trusts these days do meet HUD requirements. My suggestion is that you send the trust to your servicer for approval before you make any changed to the title of the home. If the trust conforms to
  HUD guidelines, then you can make the change to title (place your title into the name of your trust) without issue. If there are problems with the trust as written, the servicer can tell you what the issues are, and your attorney can amend the trust so that you do not run into a situation where you run the risk of having your loan called due and payable.
  The absolute worst-case scenario is that your attorney and you do not feel that the HUD requirements will work for you and then you need to decide if you want to keep the home out of the trust or refinance the loan.
  But in all honesty, we have never had a borrower yet or their attorney take issue with the HUD requirements, except when the trust was created before the loan and could not be changed by virtue of the terms of the trust for one reason or another.
  Reply to Michael
Robert B.
September 30th, 2022

I am a personal representative for a person who has passed away. She has a reverse mortgage. The house is in a trust. the trust has beneficiaries. There is a balance owed of approx. $119,000.00 the house is worth approx. $700,000. So, there is a ton of equity. The trust has the cash to pay off the loan so the trust can capture the equity. The problem is the loan servicing company won't talk to me because they don't have a signed permission slip from the deceased. What do I do? Thank you, ARLO!
Reply to Robert
- Michael Branson
  September 30th, 2022
  
  Hello Robert,
  
  Every trust I have seen also contains other legal documents to empower others to act on behalf of the trustee such as Power of Attorney (POA), etc. should the need arise. Is there a current POA that survived the passing of the borrower that allows you or someone else to act on behalf of the deceased homeowner? If so, you can send them that information and the lender will recognize that. I don't know what your capacity of "personal representative" consists of.
  If you do not have POA, are not an heir or successor trustee named in the trust, you may need to get a court order to have your standing verified. The lender will not give any information on the loan to any third party they cannot verify having the legal right or borrower's authorization to obtain it. If you are not sure how to get the court's order, you should contact an estate attorney in your area.
  Reply to Michael
Suzanne A.
September 1st, 2022

I was awarded a fairly large judgement during our divorce in 2021. My ex-spouse was awarded the marital home upon payment of the judgement when I would sign a quit claim deed. Ex-spouse has now applied for a Reverse mortgage to pay the judgement. The Reverse mortgage company has emailed me numerous forms to sign i.e., Beneficiary Demand /Affidavit of Trustee/Affidavit Uninsured Deed /An untitled document that appears to deal with recording the Deed and a Quit Claim Deed. The marital home was and still is held in our separate revocable Trusts with 50% interest to both of us. The documents received from the Reverse Mortgage company shows that ex-spouse Trust is now held by hm and his daughter. Should I be wary about signing any of these documents, after all I am not the Reverse mortgage companies client - my ex-spouse is. I do not want legal ramifications to come back and bite me in the future. Thanks for your time, Arlo.
Reply to Suzanne
- Michael Branson
  September 1st, 2022
  
  Hello Suzanne,
  
  I am not an attorney and cannot give you legal advice. The reverse mortgage will require certain items to be sure that the title is solely in your ex-husband's name and so that the title company can insure the title as such. I cannot advise you regarding any remaining interest you may have in the property or how to be certain that you have no liability.
  The fact that you say the marital property remains in separate trusts may be the issue they are seeking to rectify. To complete the loan he is seeking, the property must be solely his. They are asking you to sign the documents that would achieve this action and your security is that you would have a Beneficiary Demand that the title company would need to pay (your portion of the settlement) for the loan to close.
  The reverse mortgage cannot close unless there are no other liens on the property. This is certainly a way to achieve the issue of making sure you receive your payment (because it is paid through title, and it never goes to the borrower as it is a payoff of a loan on the property) and allowing the loan to close.
  
  However, let me reiterate that this is not legal advice. All I am doing is explaining the process. To be sure that the terms are what you agreed to and are acceptable to you, it would be wise to have an attorney review the entire transaction to be certain that you are covered and are receiving all amounts due to you (perhaps the attorney who handled your divorce could do this for you).
  Reply to Michael
Jon D.
July 21st, 2022

My dad and I are trustees on title on the home he lives in and I don't live in the home. He qualifies for a reverse mortgage but will the home being in trust, me being a co-trustee and me not being a senior preclude him from getting a reverse mortgage?
Reply to Jon
- Michael Branson
  July 21st, 2022
  
  Not necessarily, but it depends on in what state the property is located. In states like Texas, that will present a problem but, in most states, there will be additional paperwork and things you will need to do to complete the loan as the co-trustee but it does not affect his ability to get the loan or you personally.
  Assuming he is the sole Beneficiary of the trust, there is not a problem having you as a co-trustee but as a co-trustee you will be involved in the signing of the loan documents (not the application, etc. as you are not a borrower).
  Reply to Michael
Robin C.
June 13th, 2022

Hello Arlo,
I am a widow living in California with my 39 year old daughter and 11 year old grandson. I do have a trust naming her my beneficiary. I was thinking about getting a reverse mortgage because money is extremely tight. She doesn't want to move if I die. Are there any options for us out there?
Reply to Robin
- Michael Branson
  June 13th, 2022
  
  Hello Robin,
  The reverse mortgage will ease your cash flow issues but you need to know that the loan will come due and payable when you pass or leave the home for any reason. Your daughter would need to pay the loan off at that time with a refinance or other cash or sell the home and move.
  The good news is that is you have the loan for a long time before she is faced with that eventuality, she has plenty of time to save and build her credit before that time comes and if something were to happen in the near future, there would still be plenty of equity in the home for her to start again if she could not buy a place of her own or refinance.
  But either way, the loan will come due when you are no longer living in the home and if you do not think she would be able to save in the meantime to be able to refinance or sell the home and start again in a new location, you need to consider another alternative if keeping her in the house is your main goal.
  Reply to Michael
Cindy B.
May 23rd, 2022

Hi Arlo,
My parents have a revocable trust which contains their primary residence. They are the trustors/beneficiaries and current trustees of their trust. My sister and I are successor co-trustees. My parents want to apply for a reverse mortgage but at their ages (91 and 94) have decided they are not up to the rigors of the application, counselling, and closing process. They have decided to resign their respective positions as trustees, having my sister and I step up as co-trustees. (An attorney is assisting us in this process.) Can my sister and I, as new trustees, pursue a reverse mortgage for them (against the primary residence which is held in the name of the trust)? Or will my parent's still have to be involved in the application and the counselling?
Reply to Cindy
- Michael Branson
  May 23rd, 2022
  
  Hello Cindy,
  
  You really should get specific information regarding your state and your circumstances.
  For instance, you cannot close a reverse mortgage in a trust at all in the state of Texas. And your parents would still need to sign the application and get counseling themselves as well as sign most of the loan documentation as individuals and then you and your sister would need to sign some of the closing documents as the trustees of the trust (in addition to the documents that must be signed by mom and dad as the individual borrowers). I don't know if the savings would be what you hoped they would but only you can make that decision regarding whether or not it is beneficial.
  
  You can also move the property into the trust after closing as long as the trust meets HUD requirements. To do that, you should send the trust to the servicer for approval before you change the title and then if it is approved, have your attorney or title company make the change.
  You get the approval first so that there is no issue with the change of title with the lender and have the title company or title attorney handle the recording of the title change (from individuals to the trust) avoiding any possibility of creating a taxable event.
  This way, if the trust needs any amendments to be acceptable to HUD, you do not have to worry about having the title be unacceptable and you will not be under the clock to get it fixed before the lender could possibly call the Note due and payable due to a breach in the terms of the loan.
  Reply to Michael
Carol S.
March 22nd, 2022

Hello Arlo,
Can a reverse mortgage company stop payments because they did not receive a copy of your trust?
Reply to Carol
- Michael Branson
  March 22nd, 2022
  
  Hello Carol,
  
  That's an interesting question and I would normally say that the lender would have seen the trust long before the loan ever closed. I can only guess that you transferred the title from yourselves as individuals to your trust after the loan closed and the lender has requested to get a copy of the trust and has ceased further disbursements until they receive a copy.
  Is that correct? If that is the case, not only can they stop giving you access to the funds but they can call the loan due and payable for the transfer of title in accordance with the terms of the legal documents.
  
  Your agreement with the lender is that you will not transfer title of the property and if you do, the lender can call the loan due and payable (and foreclose on the loan if you do not pay it back once it has been called). The terms allow you to place the home into an approved trust, but the only way to determine if the trust is approved is to allow the lender to review and approve it.
  We always advise borrowers to allow the lender to review the trust before the transfer of title and that way if the trust is not acceptable for some reason, it allows you time to make corrections to the trust before any change of title has taken place. If the circumstances I described above are not accurate, then I do not know why this would be happening and I would suggest you contact the lender to work out the issue.
  If you did transfer the title of the property, you should send the trust to your lender, let them approve it as soon as possible because if you do not or if the trust cannot be approved, you may need time to correct any possible title issues and you certainly do not want to be in default of the loan provisions.
  Reply to Michael
Peggy D.
February 16th, 2022

Hi Arlo,
I did a reverse mortgage on my non community property home which the reverse mortgage company put him on title then removed him with his permission and allowed my home to go back into the Trust I am and was trustee of.
Now we want to do a new reverse and the guy selling us said he has to tell his home office that my husband is not on the title and they feel they may call the loan! Where do I stand? The Trustee and wife to the man on the loan who signed the papers. Can they call the loan?
Reply to Peggy
- Michael Branson
  February 16th, 2022
  
  Hello Peggy,
  
  I do not know why they would tell you such a thing. Your loan documents specifically state that the borrower(s) can add anyone else to title at any time or can remove one borrower but that as long as at least one original borrower is also still on title and still living in the home as their primary residence the loan meets the terms of the original requirements.
  They also state that the transfer of your title into or out of your trust that is approved by HUD or to you as an individual is not grounds to call the loan due and payable. The lender or servicer who is servicing your current loan receives notification of any transfer of title on any of their loans and so they would have conceivably already been notified of the transfer of your title to your trust or to you as one of the original borrowers as an individual.
  Most companies would have probably contacted you and requested a copy of the trust if it was going from you to your trust but if there were no funds remaining for distribution, I am aware of several instances where servicers did not even ask for the trust when the trust was clearly the borrowers' family trust. I find it extremely odd that a new lender would threaten a contact your servicer and possibly calling the loan due and payable, especially if they plan to refinance the loan and replace it with a new loan at this time anyway.
  Reply to Michael
Carol F.
August 9th, 2021

In the state of Maryland, and have a reverse mortgage, and a living will, can I also put the house in a Trust? or does it have to go into probate?
Reply to Carol
- Michael Branson
  August 9th, 2021
  
  Hello Carol,
  
  HUD allows you to put the home title in the name of an approved trust. Just be sure to send the trust to the lender or their servicing agent for approval before you make the title change.
  If the trust does not meet HUD requirements for some reason, you can usually have your attorney draw an amendment to correct the deficiency but if you make the title change before the trust is cleared, that would be an unapproved change of title which could cause the lender to call the loan due and payable.
  Reply to Michael
  - Michael Branson
    August 10th, 2021
    
    Hello Crissy,
    
    Have you spoken with your sibling and impressed upon him/her the importance of taking care of this matter immediately? If your sibling will not take their position of executor seriously, I believe you have recourse, but you will need to speak with an attorney to determine what needs to be done. I am not an attorney and cannot give you legal advice but I can tell you that I had an attorney once advise me that an executor does have liability to others in a trust situation.
    That may not be true for all circumstances or in all states though, so you really need to speak with an attorney right away to see if what actions are available to you. It may be that the trust has provisions for the substitution of the executor if the executor is not able or willing to act in the best interest of the trust and it may be that the state has provisions for such. You just cannot wait too long to act or by the time the trust gets situated, it will be too late for the home.
    
    I can advise you about the house and the loan. My advice is to determine what you want/need to do. The loan is now due and payable. If you and your sibling want to keep the home, you would need to pay the loan off either with funds available to you or with a new loan at this time.
    If that is not feasible, you need to sell the home to retain the equity. Whatever you decide to do, I would suggest that you reason with your sibling and show them that they get nothing if you don't send the letter of intend to the lender and start to do something and as a result, the lender forecloses, and all the equity is lost.
    Reply to Michael
Crissy
August 7th, 2021

My dad passed away with a reverse mortgage. We have a living trust. My sibling is listed as the executor or successor, and we are both listed as beneficiary on the reverse mortgage property. The property has a lot of equity. The problem is my sibling who is the successor is not communicating with the reverse mortgage company and hasn't provided a letter of intent. I called the bank and they told me they are starting foreclosure procedures. What can I do to protect my interest?
Reply to Crissy
Rebekah
June 29th, 2021

My mother is in the process of getting a reverse mortgage. The agent processing the documents has told me (my mothers POA) that they need a copy of her entire trust. That seems a little intrusive to me. What part of the trust do they actually need to process the mortgage?
Reply to Rebekah
- Michael Branson
  June 29th, 2021
  
  Hello Rebekah,
  If you are acting on your mom's behalf, in other words, you are signing the documents as her agent with Power of Attorney (POA) because she is incapacitated, then in most instances you would need to supply the entire trust so that the lender can determine when and under what conditions a POA may be used.
  
  Some states, such as California, do have laws that allow a lender to rely upon a trust certification that you could have your attorney prepare and submit in lieu of the entire trust along with a specific amendment to the trust but it is usually much more expensive to the borrower to have their attorney do both the certification and the amendment for the loan but you could ask your lender if that option is available to you if you are that adverse to supplying them a copy of the actual trust.
  Reply to Michael
Dave
June 2nd, 2021

Once I have a reverse mortgage in place can I convey title to the trustee of an Illinois land trust without defaulting on the loan?
Reply to Dave
- Michael Branson
  June 2nd, 2021
  
  Hello Dave,
  
  As long as the trust meets HUD's requirements you can convey title to the trust but I would encourage you to send the trust to the servicer for prior approval before you do the conveyance so that you have no issues later.
  Most of the time there are no problems as long as you are the beneficiary of the trust and most trusts do meet the HUD requirements these days, but you do not want to make the change and then find out that there are issues that would warrant a call of the loan if not corrected.
  It is so simple just to have the trust approved in advance and then have the title changed to the trust after approval, there is no reason to take a chance by changing the title prior to the lender's approval.
  Reply to Michael
Cynthia W.
January 20th, 2021

Can you do a reverse mortgage on a house if the house is in a special needs trust?
Reply to Cynthia
- Michael Branson
  January 20th, 2021
  
  Hello Cynthia,
  
  All trusts much meet HUD guidelines/requirements and so I cannot answer this question with just the information given.
  I can tell you though that you can present the trust to your lender and they can have it reviewed and let you know if it meets the HUD requirements.
  Most trusts we see do and very often, even those that do not can be amended easily with family and attorney approval so that they do.
  Occasionally, though, we see trusts that will not meet the HUD requirements, are irrevocable and cannot be amended or families are unwilling to make the necessary changes, and, in those cases, we cannot close a reverse mortgage on a property wherein the title is vested in such a trust.
  But you never know until you have the trust reviewed.
  Reply to Michael
Amy N.
December 28th, 2020

The home was out into a trust from the borrower to the spouse. Now the spouse has been fighting with the bank to have the reverse mortgage transferred to them. All documents have been submitted 3 times, with numerous calls saying something new is needed each time. How does the spouse fight to get the paperwork submitted to HUD the transfer approval?
Reply to Amy
- Michael Branson
  December 28th, 2020
  
  Hello Amy,
  
  I really am not sure I understand what you are asking so please forgive me if I answer incorrectly.
  Are you telling me that the loan was made to single individual and now after the loan has closed, that individual transferred the title to a trust and now the spouse is trying to have the loan transferred to him/her because of their status in the trust in lieu of the original borrower?
  Because if that is the case, it will never be approved. You cannot add or transfer a reverse mortgage to a new borrower.
  If the original borrower is still on title and living in the property, if that borrower wants to transfer the title into their trust with another person as well, HUD will allow that if the trust meets HUD requirements, but the loan will still become due and payable when the original borrower is no longer living in the home as their primary residence.
  
  I am only guessing that the problem is that the original borrower is no longer living in the home or may be deceased due to your comments about the spouse being the one who needs to fight to get the trust accepted.
  If this is the case, the spouse needs to understand that the loan will be called due and payable and needs to start working on replacing the financing with a new loan (and it can even be another reverse mortgage if they and the property qualify under current guidelines), or the property may need to be sold before the lender calls the loan due and payable.
  If this is not the case and the original borrower is still alive and living in the property, you can always contact the attorney who set up the trust to request that they determine the reason for the snags and if they are not familiar with HUD requirements, you can search for an attorney who specializes in trust reviews for HUD loans and ask them to review the trust for you to let you know specifically why the trust is not compliant and what amendments would be required.
  This will keep you from changing one thing only to find out that the changes are not compliant either.
  You can probably find such legal counsel with a simple internet search in your area and just be sure to ask them if they have reviewed trusts for HUD compliance for lenders when you contact them.
  Reply to Michael
Jamie A.
December 8th, 2020

My mother has a trust and a reverse mortgage. The reverse mortgage was sold, and the new owner of the loan is now asking for a copy of the trust. Do they need everything, including bank account and life insurance information, or only select documents?
Reply to Jamie
- Michael Branson
  December 8th, 2020
  
  Hello Jamie,
  
  Was the property in the trust when she received the loan?
  If so, the first lender already has the trust and I would ask them why they are not getting the trust from them.
  In any case, I would just contact them and ask if a certification of trust would work or the least amount of documentation at this point.
  Reply to Michael
Russell
October 1st, 2020

Can you obtain a reverse mortgage on your house and then turn around and put it in an irrevocable trust?
Reply to Russell
- Michael Branson
  October 1st, 2020
  
  Hello Russell,
  
  The terms of the trust must meet HUD requirements so I would urge you to be sure you sent the trust to the lender for review before you made any changes to title.
  If you transfer the title and the trust is not acceptable, the loan would be called due and payable.
  You can even take the loan out in the name of an acceptable trust, thereby having the trust reviewed and approved before you even get the loan if you think it might be a point of contention later.
  Reply to Michael
Suzan M.
September 22nd, 2020

I have a reverse mortgage in my name only. My adult son resides with me and is my beneficiary. Am I allowed to add him to my deed as a joint tenant, or create a living trust to avoid probate? I understand he will still have to sell or refinance, I just want to be able to avoid probate, and my home is my only significant asset.
Reply to Suzan
- Michael Branson
  September 22nd, 2020
  
  Hello Susan,
  
  If you remain on title as well, he can be added to title at any time. I cannot advise if that will eliminate the need for probate though.
  For that advice, you should contact an estate attorney in your area.
  Reply to Michael
FRANK K.
September 20th, 2020

My mom has a reverse mortgage and has myself and 2 siblings in her will for us to inherit the home when she passes away. My question is do we need to do anything now to make it easier to sell her house when she passes? Can she put her estate in a trust with her children as beneficiaries and have a reverse mortgage at the same time? Any suggestions?
Reply to FRANK
- Michael Branson
  September 20th, 2020
  
  Hello Frank,
  
  There are several things you can do at this time. First and foremost, have your mom write a letter to the lender authorizing them to speak with you and you to them about all things concerning her loan.
  Many times, things are needlessly delayed only because a lender cannot discuss the loan with a third party without proper authorization from the borrower.
  Mom can add you both to title now if she wishes so that when the time comes, you are not scrambling to have the title changed.
  Keep in mind that she can add you to title with her but she cannot transfer title to you from her name.
  Whereas she can add others to title with her, if she is not also on title with them, the lender would call the loan due and payable.
  
  Also keep in mind that the title change may help in some ways but may not change any probation requirements.
  I know a lot of times people do not like what they consider added expenses of attorneys but having and using a good estate attorney can save you time and money in the long run.
  I would suggest you use an estate attorney to plan the best method (whether it be by trust or other method) to be able to move quickly and efficiently when the time comes.
  Become familiar with senior real estate specialists in your area.
  Most find that parents and grandparents have some treasured articles that they always want to keep, but never have the space or the inclination to keep a whole house of furniture and furnishings if you and your siblings already have homes.
  A senior real estate specialist can often help with estate sales and have the property ready to sell quickly and the sooner the property sells, the sooner the interest stops accruing on mom's mortgage.
  This might be important for end of life expenses or future care for mom.
  
  Being prepared is the best advice I can give anyone.
  I think it will also help your mom to know that things are taken care of so she doesn't need to worry about it (mom's worry about us right up until the end and this is one less thing she needs to worry about).
  Reply to Michael
Jeffrey R.
February 6th, 2020

Can you get a reverse mortgage loan if the house went thru a family trust and not probate?
Reply to Jeffrey
- Michael Branson
  February 6th, 2020
  
  Hi Jeffrey,
  
  As long as the trust was correctly set up, the title was passed in accordance with the terms of the trust and the state law, the lender and the title company will accept it, the property may not need to go through probate.
  However, often, the property still must go through probate in most instances. Would not know for sure until all documentation had been received and reviewed as well as the state requirements.
  Reply to Michael
Donald
November 25th, 2019

My mother has a reverse mortgage and wants to place her home in a trust so she can qualify for Medicaid.
Reply to Donald
- Michael Branson
  November 25th, 2019
  
  Hello Donald,
  
  This is not a problem at all. The only thing you need to do is make sure the trust meets HUD requirements, so I suggest you send the trust to the lender for approval BEFORE you have the attorney change the title.
  Once approved, the attorney can record the Deed to put the title into the name of the trust but if the trust needs an amendment to meet the HUD requirements, you have not already changed the title to an unacceptable title holder.
  Changing title to an unapproved entity could be grounds for calling the Note due and payable so this is an important step and well worth the extra few days to do correctly.
  Reply to Michael
Kevin H.
November 13th, 2019

My wife's mother recently passed away with no will or trust. She has a reverse mortgage. My wife has petitioned to be administrator. We would like to keep the home by refinancing the loan. Is there a way to do this during probate? We have been told we need ownership in order to refinance, probate needs to close to obtain ownership and probate cannot close unless mortgage debt is paid. If we don't have other funds to pay off mortgage debt, is there another way to refinance to keep the home?
Reply to Kevin
- Michael Branson
  November 13th, 2019
  
  Hello Kevin,
  
  This seems a bit odd. I cannot give you legal advice and I suggest that you contact an estate attorney.
  This is a very common situation and people close probate all the time which clears the title and allows the heirs to either sell the property or refinance it.
  It is true, no lender can lend you funds to pay off the existing loan using a property as collateral when you are not on title because you cannot encumber the property.
  But as I stated, there seems to be something wrong with the probate process because every other time someone passes without a will, those properties also go through probate and are not stopped cold until the mortgage debt is paid in full.
  You need an estate attorney who can get you over that hurdle.
  Reply to Michael
James D.
September 23rd, 2019

The younger borrow died three years ago. I opened a family trust prior but didn't place or reverse mortgage home in the trust. The appraised value fell from $112,000 to about $60,000. The lone heir, my granddaughter will not want the home when I die (unless new valuations exceed $112,000. The mortgage company will need to take it back Will this mean the possible need to probate for the one property or since financially the loan underlying loan ($86 k) exceeds market value. Should I put this in my family trust or remain out of the trust?
Reply to James
- Michael Branson
  September 23rd, 2019
  
  Hello James,
  
  I can give you advice about the loan, but I cannot advise you about legal or accounting matters. Our licensing as Mortgage Bankers prohibits it for one and I would not begin to try to tell you that I am up on all legal and accounting issues for another. The loan is a non-recourse loan.
  This mean that regardless of whether the loan is in your name as an individual or your trust, the lender can seek repayment only from the property. They cannot look to other estate assets or those of your heirs to repay the loan. Whether or not there are other benefits or liabilities regarding your estate, you really need to talk to an estate attorney, and I would advise that conversation.
  
  I also would advise that anytime you contemplate a change of title (even if from you to your trust), that you also consult an attorney to determine possible tax (property and personal) ramifications to be sure it is done correctly.
  And if you do decide to move the title to your trust, be sure to send the trust to the lender for approval before you change the title. You can always transfer the title to a trust approved under HUD requirements but if the Trust does not meet HUD parameters, the lender could call the loan due and payable so you want to be sure the trust is acceptable or give you time to change it before the title changes.
  Reply to Michael
Frederick
September 4th, 2019

I would like to know can my sister who claims that mom left her as trustee over the home that we both live in and she never has shown papers. Mom died three years ago, and she is trying to get reverse mortgage a loan on the house without me, the home is in a living trust.
We are both over 63 can she do that. We still owe the bank on the house. She thinks being a trustee over the estate entitles her to do what she wants. we are both on disability and seniors. If she can, if she dies, would I have to leave my home, it is in a living trust.
Reply to Frederick
- Michael Branson
  September 4th, 2019
  
  Hello Frederick,
  
  You can get a reverse mortgage on a property in a trust if the trust meets the HUD requirements. I could not tell you if your mom's trust would meet those requirements, if your sister is the sole trustee now or what rights she has vs those of the two of you.
  Just being the trustee though does not necessarily give an heir the absolute right to do something and she may have obligations to the estate and to others under the trust.
  I would strongly suggest that you contact an attorney (especially your mom's attorney if you know who that is) and check to see if you can get some information on the trust, the property and your rights as an heir.
  Reply to Michael
Hallie
August 23rd, 2019

What about having a reverse mortgage already taken out on the home, and then placing the property into a trust?
Reply to Hallie
- Michael Branson
  August 23rd, 2019
  
  Hi Janice,
  The same way you would refinance any other loan. Seek a lender, have your loan approved and your escrow company/closing agent will send a Demand Request to the reverse mortgage lender when the loan is ready to close and they will pay the loan off with the new loan proceeds.
  Reply to Michael
Barbara G.
July 21st, 2019

I live in Texas and I am a trustee of a home that my aunt left my disable sister (until my sister passes away) I am trying to get a Reverse Mortgage loan does the will have to probated also I was told I could dissolve the trust?
Reply to Barbara
- Michael Branson
  July 21st, 2019
  
  Hello Barbara,
  
  I would have to refer you to an estate attorney in your state to answer the question of what legal steps you must take to clear the title. I am not an attorney and I would not want to give you the wrong information (especially since I am not allowed to give legal advice in accordance with our licensing).
  I can tell you that depending on the nature of the trust, the way the title is held and the qualifications (age, etc.), there is a possibility that the whole situation may not be eligible for a reverse mortgage. I would advise you to have the entire thing reviewed before you begin to spend money on counseling, etc. to be sure that the way the title was left will not make the reverse mortgage unattainable.
  Reply to Michael
Ellie D.
July 15th, 2019

Both parents have passed. There are 3 adult kids. Youngest has resided in the home for over 25 years. Last 3-4 years has been to be the sole caregiver. 7-8 years ago, the home was reversed mortgaged at which time the youngest siblings name was added as a 3rd party. RM knew the circumstances of why the youngest was residing in the home. There is NO WILL, TRUST or any other legal documents that have been found. Therefore, it's turned into a real family feud. Youngest wants to stay in the home until able to find a place to live & in the beginning was going to clean out the house. (50 plus years of stuff). One sibling is really stirring he pot with all kinds of statements. With no will or anything that says anything, what now. House is upside down & lines against it. There is zero equity, house needs major work. More than anyone of them can afford. How long can the youngest stay in the home, it's being kept up according to the guidelines. What recourse do the other two siblings have? When & how does probate figure into all of this? It's a real mess & they need some serious help & guidance. Thank you for your site, been a lot of help in the past.
Reply to Ellie
- Michael Branson
  July 15th, 2019
  
  Hello Ellie,
  
  I cannot give you legal advice and would strongly suggest that you contact an attorney to determine everyone's legal rights and obligations. I can tell you with the ramifications for the loan will be. You stated that the one sibling was added "as a third party". The nature of this addition will make all the difference in the world to the lender under the HUD rules about what will happen next.
  If the sibling that was added was also 62 years of age and was added to title at the time the loan was closed and is also on the loan, the loan is still valid and that sibling can remain in the property under the terms of the reverse mortgage for life notwithstanding anything you all determine is legally required with regard to asset distribution.
  The loan does not make that determination. If that sibling is on the loan, he/she can remain in the property under the terms of the loan.
  
  However, if the sibling was added to title after the loan was closed, or if the sibling is not eligible for the loan (was not 62 at the time), the addition of that individual does not affect the loan to your parents, but it also does not prevent the loan from being called due and payable now that neither of the original borrowers is living in the home.
  In other words, the lender will now call the loan due and payable if they are aware that the parents have passed and the fact that the other sibling is on title does not stop this requirement. Probate and how that will now work is all a legal matter and a question for your attorney.
  I really do advise you to contact an estate attorney sooner rather than later because once the clock starts ticking from the lender calling the Note Due and Payable, things will begin moving fast and it is always best to be prepared.
  Reply to Michael
Mark W.
June 10th, 2019

Can a trustee be able to do a reverse mortgage?
Reply to Mark
- Michael Branson
  June 10th, 2019
  
  Hello Mark,
  
  A trustee of a trust can use the property as the security for a reverse mortgage as long as the trust allows it, the trust meets the HUD requirements and the Trustee/property meet all of HUD's requirements for a reverse mortgage (minimum age, lives in the home as primary residence, pays taxes and insurance in a timely manner, the property meets HUD requirements, etc.).
  You do not have to take the property out of the trust and it is very common to have reverse mortgages in the name of the trust as opposed to forward or traditional mortgages that often require borrowers to take the property out of the trust, complete the loan and then Deed the property back into the trust after the loan is completed.
  Reply to Michael
Denyse
May 1st, 2019

We have a reverse mortgage. We will never be able to pay off the accumulating debt. My husband and I each have a life insurance we are each the beneficiary of each other's life insurances followed by our daughters. Do our life insurances have to pay off the debt or can the house go into foreclosure on our passing and our daughters keep the life insurance or is the life insurance obligated by law to pay off our debts? I am thinking perhaps a way around this would be to change the beneficiary to a trust fund. If so what kind of trust fund, would it be a Living Trust or just a Trust Fund?
Reply to Denyse
- Michael Branson
  May 1st, 2019
  
  Hello Denyse,
  
  The great thing about a reverse mortgage is that there is no recourse other than the property. The lender can seek repayment from no other assets other than the property. If the loan balance is greater than the value of the home at the time you pass, your daughters have a choice. They can pay off the loan at 95% of the current value of the home or the amount owed, whichever is less. Or they can walk away and let the lender take the property and owe nothing. They never have to worry about the lender seeking repayment from any other assets, including any insurance benefits they receive.
  
  You don't have to do anything to ensure this protection, it is already written into your loan documents. The documents already specify that the loan is a non-recourse loan and that the lender may look to no other assets. If you want to start a family trust that is completely your choice and might be a good thing to speak with an estate attorney about anyway as there might be other benefits but you don't have to worry about the reverse mortgage going after any other assets.
  Reply to Michael
CG
April 25th, 2019

If your home is in a trust and you decide to do a reverse mortgage, do I need to pull my home out of the trust do the reverse mortgage then put back in trust? Or does the title company do that?
Reply to CG
- Michael Branson
  April 25th, 2019
  
  Good Afternoon,
  
  Your trust has to meet HUD requirements and then you do not have to take the home out of the trust to close the loan. It does not do any good to have the house taken out of the trust with the intention of putting it back in later if the trust does not meet the requirements because that would constitute an unauthorized transfer of ownership and they could call the loan due and payable. The best thing to do is to submit the trust for approval, most are just fine, and if it is not ok as is, most can be rectified with an amendment to the trust that is usually for your protection anyway.
  Reply to Michael
Beatrice A.
March 26th, 2019

I have a Reverse Mortgage and want to set up living trust, can that be done?
Reply to Beatrice
- Michael Branson
  March 26th, 2019
  
  Hello Beatrice,
  
  Yes, you can and your documents even state that transfer into an approved trust is not reason to call the loan due and payable. What you should do is have the trust drawn up then send to your lender for approval BEFORE you move the title of the property into the trust.
  Most trusts created these days meet HUD requirements but if there is something in yours that is not approved, you do not want to have any issues. Once you have received approval from the lender for the title to change, then your attorney or title company can make the change easily and without concern.
  Reply to Michael
  - Cindy G.
    December 6th, 2019
    
    I need to write my mother's reverse mortgage into a trust and I want to use an online program i.e. Quicken Willmaker and Trust or LegalZoom, are those acceptable programs to get the reverse mortgage included into the trust? I keep reading about "getting approval prior" to making the trust. These programs do not need a lawyer apparently, is there a need for a lawyer for this process? Thank you
    Reply to Cindy
    - Michael Branson
      December 14th, 2019
      
      Hello Cindy,
      
      I do not know the terms contained in their programs, but I would be willing to be they are just fine. You just need to be sure to send the proposed trust to the lender BEFORE you change the title of the property putting into the trust. If there is anything that is not acceptable and a change (an amendment) is needed, they will tell you and give you an opportunity to make the change before you run the risk of having the loan called due and payable for improper title.
      Reply to Michael

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Trust FAQs

Can I put my reverse mortgage in a trust?

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Can I obtain a reverse mortgage if I am a successor beneficiary of a trust?

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America's #1 Rated Reverse Mortgage Lender*

Reverse Mortgage with a Trust — Living Trust & Family Trust

Including Your Partner in a Reverse Mortgage

Trusts & Non-Borrowing Spouses

Trust FAQs

Can I put my reverse mortgage in a trust?

What are my options if my trust fails to meet the guidelines to obtain a reverse mortgage?

Can a property be taken out of trust before or after I obtain a reverse mortgage?

Can I amend my trust after I get a reverse mortgage?

Can I obtain a reverse mortgage if I am a successor beneficiary of a trust?

Have a Question About Reverse Mortgages?

Over 2000 of your questions answered by ARLO™ Ask your question now!

Leave a Reply to This Article

See exactly how much you qualify for — with zero pressure.

Today's HECM rate, in your inbox each Monday.

Over 2000 of your questions answered by ARLO™
Ask your question now!