My mother just passed away, but had a reverse mortgage. If I'm supposed to take it over, how do I release my siblings share of the estate? - AgingCare.com

My mother just passed away, but had a reverse mortgage. If I'm supposed to take it over, how do I release my siblings share of the estate?

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My Mother just passed away I took care of her for 5 1/2 years for 20 hours a day. She got a reverse morgage to take care of her for 4 hours a day for essential care bathing help dressing, cooking. The reverse morgage cost about 60 thousand dollars over the 5 1/2 years. I was asked to take over the reverse morgage but on the will it has five other siblings on it. My brother who helped verbally take care of her the other did not participate at all he said do not pay for the reverse morgage because they are so spitful they would sue for there part of the house later. The question is how would I get to release their 1 sixth of the estate. We have not talked due to the way they treated me and my Mother over the last five years. They were mad at her because she was getting caretakers to take care of her and for companionship. Really they were mad because she outlived her inheritence. Any info would help. Thanks P.S. I do not have or was given any money to start over.

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The mortgage must be paid off following the death of the last homeowner (e.g., if a married couple took out the loan). There is no "taking over" the loan at this point. If the family members do not want to pay back the bank, then the house must be sold to do so. If there are any remaining proceeds after the sale of the house, it will pass under the terms of the will.
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That one sixth of the estate you mention means just that: one sixth of the estate, which means the value of your late mother's property minus any outstanding liabilities. Any sibling who thinks he's entitled to a share of your mother's assets as they were prior to her taking out the reverse mortgage has another think coming.

Unless you're terribly attached to the house emotionally, and have the funds to finance keeping it on, you would do better to wind the estate up neatly by selling the house and paying off the RM.

On a personal note, I am rapidly developing a visceral loathing for reverse mortgages and all their ilk - over here, in the UK, they're called "equity release" schemes and they make me shudder. They're pure exploitation of elders' natural inclination to stay put instead of downsizing, and are just a fancy presentation of often outrageous interest rates on avoidable debt.
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"fancy presentation of often outrageous interest rates on avoidable debt." Perhaps a different method of "loan sharking"? That's how I view them.
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Think of getting involved with "taking over" an RM as approaching a big pit of quicksand. Stop, back up, and rethink your strategy.

First, who "asked" you to take over the RM? Was it a rep of the RM?

Second, there may be provisions in the RM that do NOT allow anyone except the original borrower to assume responsibility or obligations under an RM.

Third, do you have the financial resources to assume liability for any portion of the RM?

Fourth, the bequest under the Will to 6 people, presumably with equal shares, would mean there are 6 people with an interest in the property securing the mortgage. You're right that they would all have to consent to your assumption of the mortgage, even if the RM company required a new mortgage (then you're really in the quicksand pit).

Fifth, the logical way to extinguish the other 5's interests would be to buy them out - i.e., pay them each of them for their 1/6 portion of interest. Then you would have yours, plus the other five interests. Can you afford to do this?

Also, can you afford upkeep and maintenance on the home?

Sixth, if some of the members aren't in communication with you, I think it's not very likely to could get them to agree to relinquish their shares, especially if you don't have the funds to buy them out.

Seventh, I guess I don't understand why you want to assume liability for something as toxic as an RM? Is it that you want to acquire the house for yourself?

Eighth, do you have any idea how much the balance of the RM is now? And how much the various payoff fees would be? Is there a penalty for early payoff?

Ninth, theoretically, if all 6 siblings have an equal share, the other 5 should contribute to pay off the RM and acquire their share free of the RM. I think this is going to be the sticking point for any action on disposition of the property.

This is a tough situation, complicated by the RM and the lack of communication as well as friction in the family. I honestly don't know what the solution would be unless all the family began working together for a resolution.

Ninth, and perhaps worse - the RM was probably "accelerated" and became due and payable on your mother's death. That's a pretty significant and immediate issue to address.

Tenth, what is the value of the property? What's the outstanding balance on the RM? If there's a significant difference, you might be able to work out an agreement with the RM company to sell the property and split the difference among your siblings. At least that way each of you would get something.
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Caretaker11 - find the RM and carefully read it. It likely is way more than 60k that is the pay off amount. Could be 75k or even more with interest & fees. The standard situation is that upon death family that are heirs have a short period of time to let the RM know what they will be doing:
- if family want to keep the home the RM must be paid off. BUT heirs will not owe more than 95% of the homes appraised value EVEN IF the balance on th RM is more.
- but if property is worth more than amount owed, family can sell home, repay the RM & keep difference
or
- Property reverts to RM and they will sell it on open market. Usually family signs a deed in lieu of foreclosure to make this happen.
Or
- if family does nothing, does not respond to letters RM sends, they foreclose.

If the RM is insured by FHA / HUD (so it's a HECM) the rules are very exact & the RM must give family time - like 60 days to come up with financing to pay off - & must follow the 95% rule. Family can get a time extension from HUD which then get the extension with the RM lender. But if it's not FHA/HUD, well it's gonna be whatever egregious terms & interest the elder unwittingly agreed to.

The RM lender or its service provider will find out about the death & sends out a letter to the property. Lenders get SS death index info daily. They will know soon that mom died. And even if she's dead, family must pay property taxes, insurance & maintenance on the property must be done for the RM to stay in force while family works out financing.

What is in moms will for division of her estate by 1/6th only matters IF there ends up being assets to actually have an estate that produces an inheritance. As others have said, usually with RMs the $ owed to pay it off is more than family can ever pay. There is no 1/6th of an estate as there are no assets. Unless RM paid, house reverts to RM lender to sell it. You have no rights to stay unless your a tenant and have protections as a tenant under your state law. RM lender or service provider can evict you otherwise. RM will do a foreclosure. Sadly it's a harsh reality.

Your post doesn't read that your siblings will be willing to front the 60k - 75k needed to pay off the RM. They really have no legal requirement to do this. If they are not interested in the house, it makes no financial sense to pay. If the house is worth way way more $$$ than 75k, you could sell it and then split the $. But you don't get the house, only a share of house sale $. I'd be concerned as to what you'll do if you're evicted. You realistically need to have a plan on where to do when it's foreclosed. 
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Tomorrow escrow will close on my mother's house of 63 years. We took out a reverse mortgage 3 years ago so that she could afford to pay for 24/7 care in her home. We've used $340,000. Although mom is alive and now lives in board and care, the payoff process for the RM is consistent. When the resident vacates the home for any reason and will not be returning, the RM company must be advised. They will send paperwork where you must indicate what you are going to do with the property - listing agreement for sale, statement that you are applying for a loan to pay off the RM, etc. If you take no action, then they can foreclose on the property so that they get their money back. You may have a 3 month window, which can be extended to a total of 6 months, if, for example, the house is for sale and is being maintained in good condition. They may send out an appraiser to determine the current value of the house.

As to the amount that you owe, you have been receiving statements each month so you should have that amount available to you in writing.

The RM company has a lien on the property. You will not be able to receive any funds from the sale of the house until that lien is paid off first from the sale. Then what remains goes to whomever is named in a will or other documents.
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I just secured an RM on moms house to hire caregivers. I am sure there will be no equity left in the home at the time of her passing unless it's within the year. The acceleration on these loans is high & fast. I am using our inheritance in lew of their (other siblings)time. I can't imagine that you assuming the RM is a good move or a possible move. My understanding is that within 90 days of moms passing, I sell the home to pay them off or turn over the keys. It's pretty much a foregone conclusion that the equity will by then be eaten up with fees & interest. If you don't speak with your siblings I don't see a way for you to keep the house. I also doubt it's worth it unless she passed without using much of the proceeds.
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Caretaker, please note: Reverse mortgages on inherited property are payable upon death, so heirs aren't allowed to assume them.

If the heirs cannot afford to pay off the Reverse Mortgage loan and fees in cash, the heirs may be able to pay off the loan by taking out a new mortgage just as if they were buying a new home.
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Momshelp, you raise a good point about using equity in lieu of siblings' helping. I like that concept; it's a way to equalize the imbalance between someone who does all the caring and those who don't.

Is this addressed in your mother's will (not trying to be nosy, just thinking about how to codify this for our situation), or have your siblings been advised of the plan?
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Listen to GardenArtist. Also, get the advice from an Elder Attorney - there is no way you will come out ahead taking on that morgage.

In today's market, you are almost certain to lose.
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