Real Estate Consultant · Chicago, IL · Member since 2008 · 1 post · 0 votes
Can a relative of a deceased person who had a reverse mortgage sell the property? Is there something to look for in the contract language or is it pretty much a dead issue? No pun intended.....
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
18y
Perfect answer jrundy!
I am of the opinion that reverse mortgages are banks "new" way to steal money and assets from the uninformed, particularly, the elderly. They charge massive amounts of fees and the homeowner has nothing left to pass down to their children/grandchildren/etc.
There may be some instances where a program such as this would be beneficial, but I feel, from an investor's standpoint, that it should be a last resort. Let's inform our parents/grandparents/elderly/etc. and offer them more viable choices. Granted, investing is not for everyone, but it is certainly a better choice financially to take equity from the home and invest in cash producing assets to generate the income needed. Then, when they pass, they have assets to hand down and do not run the risk of outliving their home equity and being placed in the streets by the lender who sold them the reverse mortage.
Real Estate Investor · Katy, TX · Member since 2008 · 430 posts · 22 votes
18y
I am not a mortgage professional, but from what I know if someone with a reverse mortgage passes away, they give the option to the family to buy the house back before they take over the house themselves.
Real Estate Investor · Amarillo, TX · Member since 2008 · 173 posts · 15 votes
18y
the executor of the decedent is responsible for the estate. If money is needed to pay liens or creditors then the house will probably be sold. The mortgage company or lending program that carries the rev. mortgage should be contacted to find out information for assuming the loan(if possible) or the ability to sell. Either way, contact an estate attorney.
Silver Spring, AL · Member since 2008 · 16 posts · 1 vote
18y
Reverse Mortgages are like any other mortgage on a property. If the owner passes away, the asset becomes property of the estate. The person who is responsible for the estate will need to obtain new financing or sell the house to pay off the reverse mortgage. Most reverse mortgages are FHA mortgages so they are assumable but the person would be subject to the same requirements - namely being over the age of 62 and living in the residence for more than 6 months out of the year.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
18y
Perfect answer jrundy!
I am of the opinion that reverse mortgages are banks "new" way to steal money and assets from the uninformed, particularly, the elderly. They charge massive amounts of fees and the homeowner has nothing left to pass down to their children/grandchildren/etc.
There may be some instances where a program such as this would be beneficial, but I feel, from an investor's standpoint, that it should be a last resort. Let's inform our parents/grandparents/elderly/etc. and offer them more viable choices. Granted, investing is not for everyone, but it is certainly a better choice financially to take equity from the home and invest in cash producing assets to generate the income needed. Then, when they pass, they have assets to hand down and do not run the risk of outliving their home equity and being placed in the streets by the lender who sold them the reverse mortage.
Residential Lender · Baltimore, MD · Member since 2009 · 3 posts · 2 votes
17y
The executor of the estate is responsible for resolving the affairs of the deceased. If there is equity in the home it can be sold, the mortgage satisfied and the remaining funds accrue to the estate. If the accrual of interest on the Reverse Mortgage used up all or most of the equity in the home, or if there is negative equity, the lender should be notified and you await further instructions. If it is a negative equity situation there is no recourse to the estate. FHA may allow a shot sale of the property. Reverse Mortgages are not assumable as suggested by a earlier writer.
Real Estate Investor · Harleysville, PA · Member since 2008 · 17 posts · 0 votes
17y
The heir of the estate has the option of: paying off the balance of the reverse if they want to keep the property, selling the property-regardless of available equity, or simply walk away from the whole process by giving it back to the bank (foreclosure).
Before selling, a FHA appraisal is needed. If there is negative equity house, can still be sold, monies given back to bank, then HUD gives them the difference (to lender) which is owed them. If there is positive equity, after sale, bank receives their money, difference goes to heir.
There is a 6month time frame from the deceased death to sell the property. Extensions are given through HUD in 90 day increments after the 6month period-provided there is on going communications with Reverse Mortgage Specialists handling the estates reverse mortgage.
You DO NOT assume someone's reverse mortgage. You either pay balance due to keep the property or you sell it. If there is negative equity-I would sell to an investor. You're not getting anything anyway, why not help someone else get a great deal, you could be forming an alliance for future deals.
Reverse Mortgages are like any other mortgage on a property. If the owner passes away, the asset becomes property of the estate. The person who is responsible for the estate will need to obtain new financing or sell the house to pay off the reverse mortgage. Most reverse mortgages are FHA mortgages so they are assumable but the person would be subject to the same requirements - namely being over the age of 62 and living in the residence for more than 6 months out of the year.
So question if the person responsible wants out they would have to pay the loan on the house and what's ever left after saling belongs to the person that's responsible??
The executor of the estate is responsible for resolving the affairs of the deceased. If there is equity in the home it can be sold, the mortgage satisfied and the remaining funds accrue to the estate. If the accrual of interest on the Reverse Mortgage used up all or most of the equity in the home, or if there is negative equity, the lender should be notified and you await further instructions. If it is a negative equity situation there is no recourse to the estate. FHA may allow a shot sale of the property. Reverse Mortgages are not assumable as suggested by a earlier writer.