Reverse mortgages can be complicated but let’s take a brief look at reverse mortgage solutions: Within 30 days of the borrower’s passing the heirs are required to notify “their intent” to the reverse mortgage lender. “Intent” is to pay off or sell. The heirs must first notify their intent to sell. Then typically provide a copy of the trust, listing contract and death certificate to the servicer. All within the initial 30-day period. A granting of a ninety day extension commonly occurs at this point however.
The servicer has different methods to learn if the heirs don’t comply. The lender usually sells the mortgage and a servicing company collects payments, etc. The servicing company typically subscribes to a number of different services which cross reference death records. In addition, they request an annual occupancy certificate.
This ninety-day extension (from the date of passing) is an extremely tight timeline.
Just imagine, a loved one has passed. You need to make funeral arrangements, talk to an accountant, and your trust attorney. And then within thirty days from passing you need to contact the reverse mortgage lender. What is needed during this tight time frame is to list the home with a Realtor. One who knows at minimum the reverse mortgage basics. The home needs to be quickly and efficiently prepared for sale. A Realtor experienced with the basics of reverse mortgages will order a preliminary title report. And then ensure that there are no additional liens that the heirs may not have been aware of.
This reverse mortgage real estate agent will also check title several times a month. This is in order to be certain that a Notice of Default (N.O.D.) was not filed. An N.O.D. initiates the foreclosure process. Once filed, you must sell the home within approximately ninety days to avoid foreclosure. While the reverse mortgage timeline is ticking your Realtor needs to be working with escrow and order payoff figures.
As you can determine this is a complicated situation. And subsequently dealt with only by experienced real estate professionals who are well versed on reverse mortgages and their solutions.
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