Losing a parent can cause incredibly powerful, sometimes debilitating emotions. At the same time, you know that there are a lot of different things you have to take care of. Handling your parent’s estate is one of those things. Unfortunately, if your parent had a reverse mortgage, time might be working against you.
The reverse mortgage program allows people who are 62 and older to access the equity in their homes to make life easier for them as they age. Under the program, the person’s heirs are supposed to be able to settle the mortgage for a percentage of the current market value. Many heirs are discovering that not all reverse mortgage companies are adhering to that portion of the program. Others are discovering that the reverse mortgage is underwater.
Some heirs are reporting that reverse mortgage lenders are seeking a foreclosure on the home within weeks of the homeowner’s death. Sadly, not all heirs know their rights when it comes to reverse mortgages. In some cases, that lack of knowledge will lead to them losing the home their parent owned.
One important point for Texas residents to remember is that the reverse mortgage company has to give you up to 30 days to decide what you want to do with the home. If you want to keep it, you are allowed up to six months to find financing. Also, remember the 95 percent rule. Lenders have to allow you to buy the home back at 95 percent of the current market value. If you are dealing with a parent’s reverse mortgage and a potential foreclosure, getting answers to any questions you have and learning your rights might help you to keep the home.
Source:El Paso Southwest Senior, “Bitter inheritance” Jessica Silver-Greenberg, May. 01, 2014