Can my mom just walk away from her reverse mortgage where she lives or will they come after her to sell it?
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Can my mom just walk away from her reverse mortgage where she lives or will they come after her to sell it?
She is 81 years old and in failing health; she can’t live in her home alone anymore. She is moving out of the state to my home where I will take care of her. She has an HECM reverse mortgage and if sold would have to pay back around $120,000. I understand if she were to sell it for less, the remaining balance that she would owe is taken care of because of HUD insurance I believe. But the home is very unclean, and to sell it would require money being put into it, and she couldn’t do that, or even be healthy enough to take on that challenge of trying to sell it. What can she do?
Asked on May 14, 2012 under Real Estate Law, Florida
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
The first thing in order to answer your question would be for you to carefully read the loan documentation and the mortgage/trust deed secured by your mother's property under the reverse mortgage in that its terms and conditions control in the absence of conflicting state and federal law.
In most circumstances, if your mother walks away from the reverse mortgage on her home, there will be no personal recourse as to her. Before she walks away from the home, I suggest that you consult with a real estate attorney in that the balance owed on the reverse mortgage is not typically due and payable until the owner of the property passes.
Possibly the home can be rented out when she is not living in it to generate some income for her care while she is living with you.
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