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It seems any information I've researched gives the general bullet points on reverse mortgages to prospective borrowers, but virtually no accounts have been posted by someone, as an heir, who has had to deal with the "after".
I am writing this as the grandson of the now two deceased co-borrowers, and the son of the heir whom, according to the description of the product, may purchase the home for the lesser of 95% of fair market value or the outstanding balance of the actual reverse mortgage.
Before I dive into the details, the frustration we are experiencing stems from three sources:
- The conflict of relatively rapid timelines demanded by the loan servicing company Financial Freedom / Celink vs. the comparatively slow nature of mortgage underwriters, estate attorneys, and the probate process as a whole.
- Connecting the dots with all the changes that have taken place in the 10 years since the loan was originated in 2008. The loan servicing company as written on the original signed documents bear the name Financial Freedom, we have been able to find a few interim mailings advising the current loan balance, but not much else.
- Mom lives in a small town in NC, is very old school and does not use a computer. We have a very small talent pool when it comes to selecting an estate attorney, much less one well-versed in reverse mortgages and what the extent of her rights are in the months following the death of the last co-borrower (her father).
Here is my mom's goal: get a loan, buy the house on the purported option for heirs to purchase the property prior to it being taken to market or foreclosed upon.
Seems simple enough, right? If you have the money to buy it, the lender should be more than happy to take a check for the full balance, instead of foreclosing. Wrong.
My mother is working with a local bank to obtain financing for the property. All she needs now is to get an appraisal. She is making attempts to contact the lender to exercise this option for heir purchase. We are at the 1 month mark following our loss. A lender-selected appraiser has been to the property, as we understood would happen within 30 days of being notified of the death. My mother was informed that she is not entitled to the results of the appraisal and that she is not allowed to be spoken to. (???)
She called another number on the loan documentation and was informed that she will need to wait for the Condolence Letter and submit the death certificate as well as the Letter of Testamentary. This has already been submitted. This is an eerie disconnect - the rep she spoke with said, with confidence, that they had not been notified of the death. However, a voicemail was left at the home telephone number to schedule the appraisal - unsolicited - within two weeks of my grandfather's death.
I can't tell if this was a fraud/scam call, if the company is really this disorganized and broken up after 10 years, or third, our worst worry, is that the system is designed as such to stall the process of even an heir with cash in hand, to deprive them of exercising this option with the intended goal of foreclosing and being able to list at full market value.
I will post updates as we move forward in the process. She had retained an attorney that has been extremely helpful regarding the estate, however, not an expert with HECM products.
We’re still making phone calls trying to find “the one” who has overseen exactly this process, full lifecycle.
It seems any information I've researched gives the general bullet points on reverse mortgages to prospective borrowers, but virtually no accounts have been posted by someone, as an heir, who has had to deal with the "after".
I am writing this as the grandson of the now two deceased co-borrowers, and the son of the heir whom, according to the description of the product, may purchase the home for the lesser of 95% of fair market value or the outstanding balance of the actual reverse mortgage.
Before I dive into the details, the frustration we are experiencing stems from three sources:
- The conflict of relatively rapid timelines demanded by the loan servicing company Financial Freedom / Celink vs. the comparatively slow nature of mortgage underwriters, estate attorneys, and the probate process as a whole.
- Connecting the dots with all the changes that have taken place in the 10 years since the loan was originated in 2008. The loan servicing company as written on the original signed documents bear the name Financial Freedom, we have been able to find a few interim mailings advising the current loan balance, but not much else.
- Mom lives in a small town in NC, is very old school and does not use a computer. We have a very small talent pool when it comes to selecting an estate attorney, much less one well-versed in reverse mortgages and what the extent of her rights are in the months following the death of the last co-borrower (her father).
Here is my mom's goal: get a loan, buy the house on the purported option for heirs to purchase the property prior to it being taken to market or foreclosed upon.
Seems simple enough, right? If you have the money to buy it, the lender should be more than happy to take a check for the full balance, instead of foreclosing. Wrong.
My mother is working with a local bank to obtain financing for the property. All she needs now is to get an appraisal. She is making attempts to contact the lender to exercise this option for heir purchase. We are at the 1 month mark following our loss. A lender-selected appraiser has been to the property, as we understood would happen within 30 days of being notified of the death. My mother was informed that she is not entitled to the results of the appraisal and that she is not allowed to be spoken to. (???)
She called another number on the loan documentation and was informed that she will need to wait for the Condolence Letter and submit the death certificate as well as the Letter of Testamentary. This has already been submitted. This is an eerie disconnect - the rep she spoke with said, with confidence, that they had not been notified of the death. However, a voicemail was left at the home telephone number to schedule the appraisal - unsolicited - within two weeks of my grandfather's death.
I can't tell if this was a fraud/scam call, if the company is really this disorganized and broken up after 10 years, or third, our worst worry, is that the system is designed as such to stall the process of even an heir with cash in hand, to deprive them of exercising this option with the intended goal of foreclosing and being able to list at full market value.
Experts... HELP!
Do you think it is probable that your Mom will be able to get the "discount" on the house. That is to say that 95% of the current appraised value will be less than the amount owed on the Reverse Mortgage? If not, you don't need to wait for the RM company to get the property appraised. Just have your lender or title company order a payoff from the RM lender and get it closed.
Do you think it is probable that your Mom will be able to get the "discount" on the house. That is to say that 95% of the current appraised value will be less than the amount owed on the Reverse Mortgage? If not, you don't need to wait for the RM company to get the property appraised. Just have your lender or title company order a payoff from the RM lender and get it closed.
We suspect the loan balance (between 140 and 141k) will come in at approximately 20k under the 95% of FMV, which is why she was trying to track them down.
Are you saying we may see the updated lienholder contact info when doing the title search? If so, then great, she'd be more than happy to proceed with buying it.
Do you or does anyone happen to know if that can hold up a sale? The (sole) recorded lienholder not able to be reached?
Dealing with a RM in an estate situation is complicated and not much is published on what and how the process works. This is a big reason why people should get them from a local company with a local person to talk to. If you know the name of the originator at Financial Freedom, that would be a call to make, assuming they are still there.
Has your Mom contacted the c-link and let them know of her intentions? That is the first step. Let them know she wants to refinance the home into her name. HUD/FHA rules allow for a 6 month period to allow for this. Two further 90 day extensions are available if she cant complete it by then. They should be able to talk to her or the personal rep of the estate and give the options for the heirs.
Second, the 95% rule only applies if the home is upside down in value. If the home value is greater than the mortgage balance, she would just need to pay off what is owed, and the remaining equity in the home is hers.
The servicer is required by HUD to conduct an appraisal within 30 days of being notified of the borrower no longer living in the home. This determines the current value and if the 95% rule applies. This appraisal is for their use only, so it wont work on her new loan.
Good luck on this and feel free to pm me with any questions. I've been down this road a couple of time in the last year.
Dealing with a RM in an estate situation is complicated and not much is published on what and how the process works. This is a big reason why people should get them from a local company with a local person to talk to. If you know the name of the originator at Financial Freedom, that would be a call to make, assuming they are still there.
Has your Mom contacted the c-link and let them know of her intentions? That is the first step. Let them know she wants to refinance the home into her name. HUD/FHA rules allow for a 6 month period to allow for this. Two further 90 day extensions are available if she cant complete it by then. They should be able to talk to her or the personal rep of the estate and give the options for the heirs.
Second, the 95% rule only applies if the home is upside down in value. If the home value is greater than the mortgage balance, she would just need to pay off what is owed, and the remaining equity in the home is hers.
The servicer is required by HUD to conduct an appraisal within 30 days of being notified of the borrower no longer living in the home. This determines the current value and if the 95% rule applies. This appraisal is for their use only, so it wont work on her new loan.
Good luck on this and feel free to pm me with any questions. I've been down this road a couple of time in the last year.
Will talk to her late tonight and post again. More to come...
We suspect the loan balance (between 140 and 141k) will come in at approximately 20k under the 95% of FMV, which is why she was trying to track them down.
Are you saying we may see the updated lienholder contact info when doing the title search? If so, then great, she'd be more than happy to proceed with buying it.
Do you or does anyone happen to know if that can hold up a sale? The (sole) recorded lienholder not able to be reached?
What you are looking for is the current servicer and yes, I believe they would show on title.
Yes, you will need to be able to obtain a payoff statement from the current servicer before the transaction can close.
What you are looking for is the current servicer and yes, I believe they would show on title.
Yes, you will need to be able to obtain a payoff statement from the current servicer before the transaction can close.
I'm thinking she should send the next DC and LoT via certified mail, return receipt requested.
If we do not receive a timely response with payoff when requested, is an RM encumbered property eligible to file for quiet title since her options were never communicated via a Repayment Notice in writing per HUD requirement?
Already past 30 days and no Repayment Notice received.
13-33DISPOSITION OF DUE AND PAYABLE MORTGAGES. For a due and payable
mortgage, the mortgagee must:
A.Issue A Repayment Notice. The mortgagor or the mortgagor's
estate must be issued a repayment notice stating that the
mortgage is due and payable. The notice must also provide
the amount of the outstanding balance and the following
instructions:
1.That the debt must be paid in full; or the property
must be sold for the lesser of the debt, including
shared appreciation, if any, or 95% of the appraised
value; or good marketable title to the property must be
deeded to the mortgagee.
2.That the mortgagor or the mortgagor's estate may
request an appraisal, at his or her own expense, if an
estimate of the property's current value is desired.
3.That if none of the actions in paragraph A. 1. above
are taken in 30 days, foreclosure will be initiated by
the mortgagee within 3 months, but not less than 1
month.
Since the reverse mortgage company has clearly missed several deadlines with providing the Condolence Letter and Repayment Notice - as well as not being able to provide any information when called - my mother is scheduled to sign papers on her loan (approved) this Friday and will proceed in the buying process. A 2nd more well-versed attorney has been retained for working our way through any red tape when seeking out the lien holder listed after performing the title search (this will be the attorney closing on the sale).
If any hiccups, you'll hear about them here.
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