Reverse Mortgage Foreclosure

[Alex Kalyan]

Hello to all,

We are new to REI and have a unique opportunity to begin our journey. We are interested in a vacant property that has been vacant for 6 months. The unique piece is that we have access to the property and can inspect all aspects. The challenge is that the property has a reverse mortgage on it. The owner has passed and there are no heirs, no will, and no designated executor of the estate. The one surviving sibling wants nothing to do with it bc the loan amount is higher then what property would be worth, plus he is older and not interested. How can we keep track of what stage of the process is this property? We would have an advantage over other bidders because we been to the house many times and we know what to expect inside. Does anyone know of any creative way to get ownership of this property/deal and is it even worth pursuing?

[Lydia R.]

@Alex Kalyan The one sibling is legally the heir to the property. Speak with that person and tell them that you are interested in buying the house and that it will not cost them any money to sell it to you. You will need to get the heir to sign an authorization to release information form which you will submit to the loan servicer so you can find out what the mortgage balance is. If the property is upside down you can request a short sale and the servicer will send out an appraiser. Bank will accept 95% of the appraised value of the property. The process is actually pretty straight forward depending on the loan servicer and not as long and as much of a pain as a traditional short sale. I would definitely say go after this one. You also need to determine ARV and repair costs.