Real Estate Broker · NYC Metro Area · Member since 2015 · 7 posts · 1 vote
Quick question that I am hoping someone can help with...
I got a call call today in response to a yellow letter I sent. It was the son of the deceased homeowner. The son said that the father took out a reverse mortgage and that after the father died, the son went to court and the judge said that the mortgage company could not take the house. The son had no time to deal with it so he just left it alone. This was 5 years ago. I checked the property records and the mortgage was assigned to another bank, but that is it. The recorded amount of the mortgage is in excess of the current value of the home. Is there anything I can do here or should I just go on to the next opportunity?
If lender cannot seek liquidation of collaterals securing loan and no one is up to wasting money to open probate in order to have standing, only to facilitate a no-win short sale?
Yep, no value here. I doubt the judge said the lender couldn't foreclose, maybe just a temporary delay. The RM short sale requires the property be sold at 95% of a current FHA appraisal, and the heirs have no liability for it, so no spread in the deal and no motivation for heirs to do it.
The loan amount RECORDED may not actually be the current mortgage balance. Why? Because FHA automatically records the lien amount as $625,500, which is the national (uniform) maximum loan amount for FHA HECMs [home equity conversion mortgage]. This is done to prevent anyone from recording a 2nd against the property. This is smart on the part of the lender because the HECM is a negative amortizing loan.
RMs where the borrower is deceased present few opportunities unless the amount of the loan payoff is in line with your purposes. Even then, unless the property is held in a trust there is no one to buy from. If the property is held in the name of decedent, you'd need a RM balance leaving sufficient equity to cover the costs of the title fix.....which assumes there are known heirs whom can act as admin/exec in a probate action. Or from whom you can buy their interest in the estate.