If your mother pulled all the equity out of her house then the reverse mortgage company owns it. What will happen is they will sell it and collect their money including the interest and fees they charge every month on the debt.
If she didn't take too much, you may be able to get a mortgage on what is owed to the reverse mortgage company. They get their money and you and your sibs get the house.
I think your best bet would be to talk to the reverse mortgage company and see if they suggest something. Then talk to a real estate agent. There may be options available.
LadyHawk, I think what you need to do is find the agreement that Mom signed. If there is something you do not understand, then call the RM company to clarify it. You all need to know now what will happen so you can make plans. Like asked, how can 4 or 5 children live with Mom and there is a need for a reversed mortgage. It all comes down to Mom has borrowed money on the equity on her house. At death or if she no longer lives in the house that loan needs to be paid back or the house is sold to pay the loan back or the Mortgage takes the house. If you do not come up with a plan, you may all need to find another place to live. Better on top of it now instead of later.
So curious if admin, AI, which is proving to be the original definition of AI (artificial insemination) or OP changed the post from 4 over 50 to four or 5, huge difference and the "correction" doesn't make any sense.
The reverse mortgage is a debt with interest and fees that HAS TO BE REPAID under the terms of the mortgage contract that once your mom dies or moves out of the home to live in a NH after 12 months, unless there remains a Co-borrower in the home or a Eligible Non-Borrowing Spouse.
If it’s a HUD guaranteed mortgage, those allow for family or heirs to repay the amount due at less than 100%. I think it’s at 90% but it has to be completed in full within 90 days. Usually an all cash sale.
if the owner or heirs / family doesn’t buy it, then RM is out of compliance and the RM will file a foreclosure then an eviction notice if anyone remains in the house.
For the reverse mortgage to remain in place, the borrower(s), who had to be over the age of 62 when the loan was obtained, must continue to reside at the property.
Are we correct in assuming that none of the siblings was old enough to be included in the original loan paperwork?
If so, the loan amount must be repaid as agreed. So the siblings may pool their savings to pay, refinance, or the home must be sold. If sold any proceeds over the loan amount due returns to the borrower’s estate.
If one or more siblings wants to buy out the others that too is possible, but seek legal advice. (Siblings as co-owners or siblings as landlords and tenants, both situations get complicated when money is tight.)
The lender will send a notice, stating the amount due and giving the occupants (30 days?) to vacate.
It’s a 2 parter, is my understanding…. Within first 30 days post death or move to NH, the RM send out a Notice of Compliance with 3 choices that family or heirs are to make a choice from - 1. buy it and pay off the RM @ 95%, 2. sell it, 3. Move out. Response due back to RM within 30 days.
which one family chooses then has its own 2nd set of paperwork family has to get back to the RM asap and timeline for its own completion. If it’s #1 buying it, they have 90 days to get the $ unless they can file for a deferral up to 6 months but have to get the deferral approved. If they can’t get the financing, it goes to noncompliance and foreclosure status. If #2 no FSBO nonsense, the RM is going to have a say in Realtor and listing agreement. Family may need to place a bond and may need to have separate short term vacant dwelling policy placed. Not added to the RM but freestanding paid for by the heirs. Vacant dwelling is not cheap. Days on market will be time limited and then goes to RM control and they do foreclosure. #3 RM sends out mortgage closure documents & takes over. HUD backs most RM via HECM $ so will be a ton of paperwork and e-signing. Family does not have to open probate or get Letter Testamentary, name Executor etc to do these documents. So that cannot be used to stall the RM from acquiring the house. It’s more an acknowledgment of the RM and it’s terms. RM hold the upper hand in all.
OR…. everybody ignores all this, foreclosure placed & anyone in the place gets booted out by Sheriffs dept and the RM outside contractor does a rehab & house goes up for sale asap.
Can you explain how 5 adults are living in a home and a reverse mortgage was needed? I realize that you are all probably contributing to helping care for her but even with everyone having a part time job, shouldn't you be able to afford the mortgage once she passes.
The mortgage will come DUE. Her estate will have to pay the mortgage and interest. That usually requires that the home be sold by the executor or administrator of Mom's estate. Whatever sale price it gets will first pay the reverse mortgage company, then your mother's other debts and then the rest of her funds will be divided among the siblings according to her will, or -- in absence of a will-- according to the laws of your state.
Alva, fwiw the RM company isn’t going to wait on probate process for RM to be paid or house to be sold. The path that an Executor can do to determine assets v. debts then fix-up & sell what’s needed, do a distribution along the way, perhaps taking months if not years to go thru, etc. won’t be an option.
RMs will take it into foreclosure. Once an RM house falls outside of any of the required compliance areas - owner pays prop taxes and insurance(s), owner maintains property (biggie is roof status), owner or their co-borrower or eligible non borrowing spouse stop living FT at the property - RM sends out a Notice of noncompliance, how noncompliance can be dealt with and specific time frame on this. If not done, foreclosure starts. Once foreclosure posted at the courthouse, an eviction notice is usually also done. Posted onto the property as well.
RM will have an outside company that deals with the property. Tends to be a Realtor group that also deals with property stuck in bankruptcy court for your area, its specialty real estate agent work. They literally swoop in, do a walk thru, determine if anything is to be secured then all excess into a dumpster, locks changed, no trespassing posted, utilities pulled or shut off. Can be done in a day or even 2 or 3. Whomever living there has no rights unless the owner had notified in writing to the RM there was a tenant and tenants have actual rental agreements. Or property as of original RM paperwork existed as a multi family dwelling units with 1 of them owner occupied & it’s the owner who got the RM….. for those the current tenant / rental agreement stays in place even when property is sold. RMs tend to offer these $ to find a new apartment and move so they can do a total overhaul on the property to put it up for sale. RM are akin to flippers as they have to get that house fixed up and sold quickly.
Most RM are HECM and these are lending guaranteed thru HUD. If the house is too far gone in repairs needed (to be profitable for the RM to even bother doing), the RM files with HUD to get the lending guarantee $ asap. & house reverts to HUD ownership. They end up becoming “adjudicative” properties sold at tax sales. Real spawn of dogs type of properties. In my city we have thousands of adjudicative that were / are owned by a governmental entity and abandoned which sit unbidden on for tax sales as title is beyond a hot mess to sink any $ into. You’d want them only if lot next door and you wanted to have a bigger yard or more parking or for safety reasons.
I think you can if you pool your money and pay off the mortgage, but it you all have the financial resources to do that I have to wonder why everyone didn't chip in to prevent the need to take one out in the first place.
It probably “seemed like a good idea at the time.”
I could speculate that Mom would do anything to stay out of a nursing home, one or more kids thought they could handle the caregiving, and maybe one or more was dependent on Mom due to their own disability or failure launch.
The loan proceeds could have been used to acquire the home or make major repairs or improvements, e.g., new roof, wheelchair access/safety, or addition for more residents.
Hopefully, this isn’t another case of the homeless former caregiver that gave up their job and lost their own nest egg in the process.
The modern day equivalent to trading in the family cow for a bag of magic beans.
I love that ad with Tom Selleck where he spends half of the commercial desperately trying to convince people it isn’t a scam.
If she didn't take too much, you may be able to get a mortgage on what is owed to the reverse mortgage company. They get their money and you and your sibs get the house.
I think your best bet would be to talk to the reverse mortgage company and see if they suggest something. Then talk to a real estate agent. There may be options available.
If it’s a HUD guaranteed mortgage, those allow for family or heirs to repay the amount due at less than 100%. I think it’s at 90% but it has to be completed in full within 90 days. Usually an all cash sale.
if the owner or heirs / family doesn’t buy it, then RM is out of compliance and the RM will file a foreclosure then an eviction notice if anyone remains in the house.
Are we correct in assuming that none of the siblings was old enough to be included in the original loan paperwork?
If so, the loan amount must be repaid as agreed. So the siblings may pool their savings to pay, refinance, or the home must be sold. If sold any proceeds over the loan amount due returns to the borrower’s estate.
If one or more siblings wants to buy out the others that too is possible, but seek legal advice. (Siblings as co-owners or siblings as landlords and tenants, both situations get complicated when money is tight.)
The lender will send a notice, stating the amount due and giving the occupants (30 days?) to vacate.
which one family chooses then has its own 2nd set of paperwork family has to get back to the RM asap and timeline for its own completion. If it’s #1 buying it, they have 90 days to get the $ unless they can file for a deferral up to 6 months but have to get the deferral approved. If they can’t get the financing, it goes to noncompliance and foreclosure status. If #2 no FSBO nonsense, the RM is going to have a say in Realtor and listing agreement. Family may need to place a bond and may need to have separate short term vacant dwelling policy placed. Not added to the RM but freestanding paid for by the heirs. Vacant dwelling is not cheap. Days on market will be time limited and then goes to RM control and they do foreclosure. #3 RM sends out mortgage closure documents & takes over. HUD backs most RM via HECM $ so will be a ton of paperwork and e-signing. Family does not have to open probate or get Letter Testamentary, name Executor etc to do these documents. So that cannot be used to stall the RM from acquiring the house. It’s more an acknowledgment of the RM and it’s terms. RM hold the upper hand in all.
OR…. everybody ignores all this, foreclosure placed & anyone in the place gets booted out by Sheriffs dept and the RM outside contractor does a rehab & house goes up for sale asap.
See an elder law attorney with further questions.
RMs will take it into foreclosure. Once an RM house falls outside of any of the required compliance areas - owner pays prop taxes and insurance(s), owner maintains property (biggie is roof status), owner or their co-borrower or eligible non borrowing spouse stop living FT at the property - RM sends out a Notice of noncompliance, how noncompliance can be dealt with and specific time frame on this. If not done, foreclosure starts. Once foreclosure posted at the courthouse, an eviction notice is usually also done. Posted onto the property as well.
RM will have an outside company that deals with the property. Tends to be a Realtor group that also deals with property stuck in bankruptcy court for your area, its specialty real estate agent work. They literally swoop in, do a walk thru, determine if anything is to be secured then all excess into a dumpster, locks changed, no trespassing posted, utilities pulled or shut off. Can be done in a day or even 2 or 3. Whomever living there has no rights unless the owner had notified in writing to the RM there was a tenant and tenants have actual rental agreements. Or property as of original RM paperwork existed as a multi family dwelling units with 1 of them owner occupied & it’s the owner who got the RM….. for those the current tenant / rental agreement stays in place even when property is sold. RMs tend to offer these $ to find a new apartment and move so they can do a total overhaul on the property to put it up for sale. RM are akin to flippers as they have to get that house fixed up and sold quickly.
Most RM are HECM and these are lending guaranteed thru HUD. If the house is too far gone in repairs needed (to be profitable for the RM to even bother doing), the RM files with HUD to get the lending guarantee $ asap. & house reverts to HUD ownership. They end up becoming “adjudicative” properties sold at tax sales. Real spawn of dogs type of properties. In my city we have thousands of adjudicative that were / are owned by a governmental entity and abandoned which sit unbidden on for tax sales as title is beyond a hot mess to sink any $ into. You’d want them only if lot next door and you wanted to have a bigger yard or more parking or for safety reasons.
I could speculate that Mom would do anything to stay out of a nursing home, one or more kids thought they could handle the caregiving, and maybe one or more was dependent on Mom due to their own disability or failure launch.
The loan proceeds could have been used to acquire the home or make major repairs or improvements, e.g., new roof, wheelchair access/safety, or addition for more residents.
Hopefully, this isn’t another case of the homeless former caregiver that gave up their job and lost their own nest egg in the process.