buy house with reverse mortgage by company thats out of business

12 Replies

I found a house driving for dollars. and skip traced to find an elderly lady in an old folks home. 

called her and she said she would love to sell me the house but she did a reverse mortgage 

and doesn't know why the house is still in her name. she said if i could figure out what to do she would help me get it done. 

I looked up the deed of trust on the county website and then looked up the lender and saw a bunch of bad reviews online, as well as an audit against the company for not following HUD's guidelines and also that it went out of business in 2011.

the company is called Financial Freedom senior funding corp governed by the state of delaware but did business out of irvine california. her deed of trust was executed to them in 2003. 

what can be done to unravel this?

Originally posted by @Shella Sanders :

I found a house driving for dollars. and skip traced to find an elderly lady in an old folks home. 

called her and she said she would love to sell me the house but she did a reverse mortgage 

and doesn't know why the house is still in her name. she said if i could figure out what to do she would help me get it done. 

I looked up the deed of trust on the county website and then looked up the lender and saw a bunch of bad reviews online, as well as an audit against the company for not following HUD's guidelines and also that it went out of business in 2011.

the company is called Financial Freedom senior funding corp governed by the state of delaware but did business out of irvine california. her deed of trust was executed to them in 2003. 

what can be done to unravel this?

Let me start with I'm no where close to an expert on this, but the following is just my opinion of how the process would likely go. 

 Sounds to me like you need a real estate attorney to unravel the title. My guess is the attorney needs to then follow the chain of custody on the title. If they really did go through bankruptcy then there may be creditors who are still owed money and have a claim to the title on that. If the attorney can make a significant enough case to go before a judge and show that the mortgage company is defunct and there are no open claims to the debt they can put it in a probationary phase (in most states) which give something like a few months for companies to search public records for things they have a claim to (much like probate court). If there is no claim then the judge could dismiss the mortgage. 

Sort version of the story...it's probably not quick and easy

@Shella Sanders I also do not claim to be an expert in reverse mortgages but I have a different suggestion. If the owner is willing to sell to you, get the property under contract and open escrow with a title company. The title company should be able to find out who owns the reverse mortgage and get a payoff. It could be very likely that the original owner of the note sold this off and that this may have changes hands a couple of times since. Lenders do not always record assignments when they sell their loans, sometimes they leave the assignments unrecorded for a buyer down the line to record. Once you receive the payoff, you'll have a better idea if you can make the deal work or not.

And then look into filing a quit claim to clear the deed .

Updated almost 3 years ago

Sorry , the term was quiet title . Not quit claim . ( worked outside all day in 90% humidity )

@Matthew Paul Is title insurance automatically part of the title company’s function? A real estate attorney was my first thought too. Is the attorney going to go to the title company? Can the investor lower costs by contacting a title company instead of paying the lawyer to do so? (Assuming the lawyer will search via a title company). And while we’re at it should be advise the investor to check for liens and tax liens?

You will have to do your own checking on the methods . I have a lawyer I stroke checks to , thats what he does for a living .

Freedom Financial’s loans were taken by Someone....you have to find out who.....some time on google, the and bankruptcy records for them may point you in the right direction.  I assume you already checked for recorded assignments.