Reverse Mortgage

(JAcksonville, Florida)

My father had a reverse mortgage taken out in 2006. He now is deceased and had to pull down all but a few thousand dollars for his care. His name is the only one on the document. The value of the house is now less than the loan. What happensnow?

Comments for Reverse Mortgage

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Jun 06, 2012
Reverse Mortgage
by: DebtCollection

I assume that your father left a will and that he designated you or someone else as the person he wanted to inherit his home. If he did, the person who is entitled to the home will have three options in regard to it. That person (the new owner) can:

Refinance the loan to pay off the existing loan.

Sell the home, pay off the existing loan and keep any money that may be left over.

Simply walk away from the home -- let the bank that has the loan on the home take back the house or foreclose on it. This is the best option if the outstanding loan on the home is greater than the home's market value. The bank cannot come after the new owner for what is still owed. In other words, the bank absorbs the full amount of the loss.

If you have any additional questions about reverse mortgages, I recommend that you meed with a real estate attorney in your area.

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