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I tried to research but only find sad stories about spouses getting evicted.
I know NY has a long process but I don't think it's as long with a reverse mortgage.
Borrower died, there's still residents in house, the house is for sale, the heir got a 6 month selling extension, sent in for the renewal but got declined. I'm not sure if it's a clerical error for the denial bc there's so many different departments and miscommunications. He's under the impression that it's 2 months (based on nothing but thin air).
I'm having a lot of trouble finding the right answer. Does anyone know?
I don't think that 'foreclosure' applies with these RM loans.
Sad or not... eviction describes the process at play: dispossession.
For sale by the bank.. right? Like with an REO property?
Maybe as a practical concession to family while the property is marketed?
Still, far better an empty house, even unstaged, than with anyone living there
who knows they have to pack up and go when a buyers offer is accepted.
This doesn't compute. With a RM there are NO heirs to the RE property.
(maybe heirs to the old furniture and stacks of magazines)
---
Who's paying the insurance (and taxes) on the property now?
There are heirs on a rm property. The mortgage company doesn't own the house, the house is collateral for the loan. Heirs can pay off the loan, sell the house and keep equity, walk away, etc.
The latest statement from the rm company shows the status as in foreclosure. I know people in New York who have been in foreclosure for 5+ years and still live in the house. However, I think the rm process might be quicker bc you wouldn't have the counseling/mediation steps.
The house won't get any offers bc it needs work and the rm company will not allow it to sell for less than 95% of appraisal.
The heir is paying the insurance, taxes and upkeep. He's also living in the house and is planning on eventually moving but isn't sure if it's a matter of months or years.
New York does have a lot of red tape but I can't find the timeline for rm.
True, but there should be a way to research it. I can easily get information on a regular foreclosure. I would think that this information should be as easy to obtain. Oh well.
Once a maturity event occurs the payoff required is the lesser of the loan balance or 95% of appraised value. As far as I know you can get up to 6 months to pay off the servicer, then the estate would need to apply for up to 2 90-days extensions from HUD. after that they would foreclose.
Appraisals can be ordered by the estate or servicer, usually within 30 days of the maturity event/default.
estate can sell, refi, pay off, or provide a deed in lieu of foreclosure. if mortgage is upside down, family member would only need to pay back 95% of appraised value to keep the home.
IMHO- if the house has equity the estate wants to sell. if the house doesnt have equity and no family members have the ability to satisfy the hecm lien, vacate and walk away.
Whatever you do- stay in touch with the loan servicing department is the best advise i can give.
also, about spouses getting evicted. rules have changed. non borrowing spouses can now stay on title and live in the home for life (without paying the loan back) even if the borrowing spouse were to pass away. they do need to meet certain requirements so do your homework (before you get one of these loans. not after)
I work with a loss ligation firm in Long Island New York.
Reverse mortgages (also called Home Equity Conversion Loans)
As for the time line - though lender specific, times generally range up to 12 months to redeem property. It should be specified in the closing documentation when they got into loan. The lender should be able to provide information.
After a borrower passes. Immediate family members are first in line to purchase house back from lender. They also have the option of selling property to pay off loan and receive proceeds.
I could write a book on these type of loans....lol.. More information - see servicing guidelines for HECLs
Dealing with this on a very personal level. Sorry to wake the dead in this thread.
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