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I needed to move into my mom's (81 yr old) home to start providing care for her dementia and become her POA. I just learned that my oldest brother talked into a reverse mortgage for what logical reason I have none. She retired after my dad passed and receives his retirement pension, her retirement and her Social Security every month @ $2300. I have had to go out on disability retirement when I was 51 with the narrowing of my spine, i had surgery in 2009 for it and felt great til 2012 when the pain become increasingly rapid...


Ok so some day my mom will either need skilled medical care facility or hopefully she will be fortunate enough to pass away gracefully. Either way i need to let the reverse mortgage company know of her passing.


What now? Does the bank now sell her house underneath me? while on disability? I'm really at a lost of what my options are when this does become a reality...Help if you know this type of financial situation and can provide any suggestions! Thanks alot

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The loan experts we spoke to when we got my dad's reverse mortgage which he needed for income to stay in his home with me as his caregiver living off of disability assured us that the mortgage company would give us three months and then an extension and up to a year. The homes continue to go up in value in our neighborhood so there will still be equity in the home but it's supposed to be split between my sister and me once the home is sold, and though I'm the one taking care of Dad full time.
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The bank loan will have to be repaid because, after all, that's what a reverse mortgage is.
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I also remember back years ago when if a couple wanted a Reversed Mortgage, only the oldest of the two could be on the loan. And if the spouse with the loan passed, then the remaining spouse had to either refinance or sell the house. That happened to my boss. The value of the house went up to a point where he couldn't refinance, so he had to sell the house he and his wife shared for 40 years. He was not a happy camper.
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FF, one small point. The wife's name has to also be on the loan papers. She isn't automatically protected. At one time in the history of RM, if the spouse wasn't the proper age (65?) their name couldn't be listed on the loan. The RM company had the underage spouse sign over their interest to the spouse making the loan. The deal was that when the underage spouse was of the age that she could be added back to the loan, they had to pay heavy fees to be added. This would protect her interest if added later but if she failed to do that, then when the listed spouse died, the underage spouse was out. This happened to a family member of mine. The laws have gotten a little better for the consumers since the RM loans came into existence but still a bad deal for most.
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bkephart, only the spouse of the person who obtained a Reverse Mortgage is allowed to stay in the house until they pass or moves into a nursing home never to return back to thehouse. And the spouse had to have been married to the person as of the day of loan application.

Otherwise, the bank will call the loan as soon as person who took out the loan passes or is now living in a nursing home. And the banks are no nonsense, within a month the mortgage company will be calling asking for payment on the loan or if the house is on the market For Sale at fair market value.

Let's hope your brother has ALL the details regarding a Reverse Mortgage.
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POA is no longer applicable when the principal dies.
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if your name is not on the loan you have no options besides moving out. Once your Mom passes the loan will come due! If your brother is the POA he will need to either sell the home and pay off the loan, deed the house over to the mortgage company or walk away and then there is foreclosure. Good luck! Reverse Mortgages are the worst things in the world especially if the house isn't worth what is owed and you can't even sell it for what is owed!
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Get it all in writing.
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If Mom has Dementia, she cannot authorize POA. With a bad back, how do you think u can help Mom? Helping my Mom out of a chair, in a shower and toileting did a number on mine. Better since I am no longer doing this. I think sitting down with brother would be a good thing. Ask him why the reversed Mortgage. Explain ur limitations and that you won't be able to do certain things as Mom needs more help. When it comes to the RM, your brother's stake in the house will be effected too. You need to know where u stand before Mom passes.
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To answer your original question, under the terms of most reverse mortgages, family is given an option to repay the mortgage within a certain amount of time after a person passes away if they want to keep the property. If your mother leaves the home permanently for skilled nursing facility, etc. most reverse mortgages will come due immediately. If you are not on the deed BEFORE mortgage is done, you don't have any rights as a resident in the house. House has a lien held by the mortgage company. Yes, the bank can sell the house "out from under you" because you don't have any rights in the situation other than as a tenant living with your mother. She can't leave the house to you in a will because a will can only grant the rights that a person actually still has in a situation. Your mother cannot add you to a deed after the mortgage because she doesn't have a right to change the mortgage company's terms/lien after the fact. Reverse mortgage means that your mother's rights to the house were encumbered (a lien put on them) for a sum of money. If that money is all gone, you need to follow up as noted by others. If brother took money, that will be a BIG problem for Medicaid application for your mother later.
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What happened to the money that mom received via the reverse mortgage?

Did it pay for her living expenses, or did brother make off with it, somehow?
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If you go to the search engine for this site and put in reverse mortgage you can get quite a bit of information and discussions on the pros and cons. Are you saying your brother is your moms POA? Otherwise your mom would have had to sign the documents agreeing to sell her home in exchange for the right to stay in it until she moved out or dies.  
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