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Brenna
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0.10 Dollars($)
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Post subject: Reverse Mortgage of deceased |
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| My mom passed away in March and she had a reverse mortgage. Because of the market, her home is worth less than what the payoff is so we decided to just let the lender take it back. The executor of her accounts is not releasing any funds from her estate because he is telling us that the mortgage company is forcing him to leave on utilities until they are finished with their inspections. He says we are looking at another 2 - 3 months at least. Does this sound right? |
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savior70
Joined: 25 Mar 2009
Posts: 1778
Location: Florida
238.16 Dollars($)
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Hi
I don't think the lender has any right to force on the executor of your mom's account. To recover the reverse mortgage money, the lender will simply sell off the property and even if there arises any deficiency, the heirs cannot be held responsible for that. I don't understand on what ground they are forcing the executor and what's the logic behind it. |
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dilipgagare
Joined: 26 Mar 2009
Posts: 58
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| A reverse mortgage is a loan product that allows homeowners 62 years of age and older to use their equity to generate tax-free income, without having to sell the home or take on a new mortgage payment. |
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Elizabeth
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Post subject: Parents have reverse mortgage |
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| My parents just told us that they have a reverse mortgage, after doing much reading the one question I have I can't find an answer for. What happens whent the time comes to sell the home and there isn't enough money from the sale of the home to repay the loan? Who is responsible for the difference? |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>What happens when the time comes to sell the home and there isn't enough money from the sale of the home to repay the loan? Who is responsible for the difference?
If it's a HECM (Home Equity Conversion Mortgage), HUD will pick up the difference - that's what the insurance is for. Neither the homeowners or heirs are obligated.
If it's a Proprietary Reverse Mortgage (commonly referred to as Jumbo Reverse Mortgage), the Lender is resonsbile for the difference. That's why Jumbo's have a higher interest rate then HECM's.
That's referred to as non-recourse. All Reverse Mortgages are non-recourse loans.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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Post subject: |
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>>he is telling us that the mortgage company is forcing him to leave on utilities until they are finished with their inspections. He says we are looking at another 2 - 3 months at least. Does this sound right?
No, it doesn't sound right. Call the Lender yourself and ask. Ask to speak to a customer service representative. You'll find the phone number on the monthly statement. Or call the Lender's main number and ask for the Customer Service department.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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Post subject: |
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>>How can you make monthly payments on your reverse mortgage to pay down the debt?
Yes, and it can be anytime, not just monthly. The only guideline is the payment must be at least $100.00.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>Both my parents just died. they had a reverse mortgage for 5 yrs. There are 6 adult heirs. Must the money be repaid in a lump sum, or can we pay back monthly?
It works exactly like a traditional mortgage in this area - all of it has to be repaid as a lump sum.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>Is it possible for her to pay back the money she received and get out of the second mortgage.
Yes, it works exactly like a traditional mortgage in this sense. However, if she were my client I'd advise her to pay it all back except 1 dollar. That'll keep the Reverse Mortgage open forever, and she'll only have to pay pennies to keep it open. That way, if she were to need a Reverse Mortgage in the future, she wouldn't have to pay all those high fees again.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>She should look if there is a pre=payment penalty attached with the mortgage.
Good suggestion! Fortunately, Reverse Mortgages don't have pre-payment penalties.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>The way it was worded to me: the three of us have the title but the reverse mortgage is in her name.
Only people 62 or older are allowed to be on Title - no exceptions. With my loans, the homeowners who are currently on Title and younger then 62 would be at the final signing table and sign a quit claim deed immediately before the loan documents are signed.
Also, everyone currently on Title must attend HUD's mandatory Reverse Mortgage Couseling session, and must sign the counseling certificate.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>If someone gets a reverse mortgage based on the current value of their home and has it for 10 years, is it possible to pay it off and get a new reverse mortgage based on the increased value of your home?
Yes, a Reverse Mortgage works exactly like a traditional mortgage in this sense. If you have a FHA-insured Reverse Mortgage program, it's called a HECM to HECM refinance, and the fees are lower because the insurance is prorated.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>What you can do is ask your grandmother to talk to the lender if he will allow her children to take over the responsibility of paying the mortgage.
The Lenders never allow this because they'd lose everytime. It's a negative amoritzation, non-recourse loan without a monthly payment - in addition to no structure existing for the heirs to make a monthly payment, the lender would loose because of the non-recourse nature of the program.
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Raymond
www.ResponsibleReverseMortgages.com |
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raymond
Community Experts
Joined: 03 Jul 2009
Posts: 839
Location: Orange County, CA
129.83 Dollars($)
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>>she is over 65 and my question is what would happen to our house when she dies if we go with a reverse mortgage?
You'll have to pay off the Reverse Mortgage to keep the house. If you're going to do this route, the proper way to do it is by the Title Holder leaving you Title via a Living Trust. That'll avoid Probate and make the Title transition easier. Also have her get a life insurance policy that leaves you with enough cash to pay back the Reverse Mortgage Lender when she passes. That'll make that process easier on you. Another way is via a Life Estate. The property becomes yours after she passes, but you've still got to pay the Reverse Mortgage lender back.
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Raymond
www.ResponsibleReverseMortgages.com |
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kathryn
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Post subject: disabled child |
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| my mom had a reverse morgage being i'm diabled do i have to pay back the reverse morgage upon her death |
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