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Thanks Art_Teacher_Mom, I suspect your scenario could pretty much be a carbon copy of what we are looking at. The state records still show the deceased as the owner of the house.
Do folks get a big lump sum at the start of their reverse mortgage? Sort of like a down payment? Or do they just get monthly payments? Someone at quilting said something about she (the deceased owner of the house) got a reverse mortgage and then "the kids took all the money" so it sounds like a lump sump of some type? Although it could also have been the monthly payments as well. This is just data from a small town rumor mill several years after the facts.
I think she may have gotten the reverse mortgage in 2006, and what would be a rough estimate of the payments on a reverse mortgage valued at $570K? $2,500 a month? The current value of the house is probably about $150K so if the payments are over $1500 per month, they should be upside down by now. Although they stopped paying them when she died, didn't they? She only had the reverse mortgage for several years. If they stopped when she died, then the house wouldn't be upside down yet unless there was a big down payment paid out.
hotzcatz:
My deceased Father in law got a lump sum. His daily-care nurse ended up stealing most of it we found out through bank statements and checks we had found she'd written herself and her boyfriend. Sad situation. Sounds like your deceased home owner had a similar problem, again.
The Realtor told me most elderly choose lump sum, but there is a payment option some do choose.
In our case, as soon as he died, the lump sum came due and every month it wasn't paid, extra charges accrued. You can bet extra monthly charges have been added to the house you're looking at, too. What is supposed to happen ideally, is the heirs sell the house rather quickly and the proceeds pay back the reverse mortgage and anything left over is the heirs.
The reverse mortg. company paid the property taxes so it wouldn't be taken over by the county.
I bet that's what's happened in your case, too.
Your best bet is to find someone who can do a Title policy search for you to show the liens. This is likely not a free service, but you might get lucky with a title agency that would help you out.
Last edited by art_teacher_mom; 02-07-2014 at 12:56 AM..
Reason: spelling! Lol
Thanks, Art_Teacher_Mom, that's a good next step. Who or what entity does a title policy search? Law firms? Title companies? Would they all be filed with the Bureau of Conveyances?
Hmm, I can search by name and find mortgages held by specific people in the database, I'll have to go see if I can search by address.
you have three payment options when you get a reverse mortgage. lump sum cash, monthly payments (term or tenure) or a credit line. you can also do combinations such as $20k upfront, $500 a month for life, plus a credit line (which can be accessed for more money down the road or to increase your monthly payments). your individual goals/needs determines the best option.
If the house appraised over 500k in 2006 when they took the reverse and its worth 150k now, I can guarantee you it's upside down.
the estate should surrender the deed to the bank and wash their hands with it. The bank would then sell it at fair market value, regardless of the mortgage balance. for example: if $300k is owed on the reverse mortgage and the house appraises for $150, the bank would sell you the house for 150K. They would then file an fha reverse mortgage insurance claim which would reimburse them for the 150k loss.
to clarify- there has been a recent ruling that gives the immediate family the option to buy back an upside down reverse mortgaged home at 95% of current fair market value.
for example. if the last remaining borrower dies and the reverse mortgage balance is $200,000. If a new FHA appraisal determines fair market value to be $100,000, the IMMEDIATE family- (spouse or child, ect)- can purchase the home for $95,000. Or they can surrender the deed to the bank and not be responsible for any losses.
before this ruling, the family would have had to pay the mortgage balance to keep the home, even if it was more than market value. an outsider would only have had to pay market value.
for example. if the last remaining borrower dies and the reverse mortgage balance is $200,000. If a new FHA appraisal determines fair market value to be $100,000, the IMMEDIATE family- (spouse or child, ect)- can purchase the home for $95,000.
Sounds like a government program. I'm willing to be the tax payer eats the $105,000 loss and pays the bank for the loss. Ridiculous. No wonder the banks are still advertising reverse mortgages, there is no way they can loose money.
the owner that we rent from just passed and she took out a reverse mortgage on the three properties. Her daughter was taking care of her and lives in one of the property and we have been paying her rent. now that the owner has passed do we continue to pay her rent? the property taxes, homeowners insurance, etc. have not been paid for a very long time, the daughter informing as there was a reverse mortgage on the property before we moved in as well as informing us about nothing being paid an it's only a matter of time before the bank takes over. what do we do?
I apologize it meant to say the daughter failed to mention anything to us about the reverse mortgage as well as not paying the insurance and property taxes. she also has continued to take rent from me and we're not sure if the bank already owns the property.please help
the owner that we rent from just passed and she took out a reverse mortgage on the three properties. Her daughter was taking care of her and lives in one of the property and we have been paying her rent. now that the owner has passed do we continue to pay her rent? the property taxes, homeowners insurance, etc. have not been paid for a very long time, the daughter informing as there was a reverse mortgage on the property before we moved in as well as informing us about nothing being paid an it's only a matter of time before the bank takes over. what do we do?
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