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As an heir to an underwater reverse mortgage, would a short sale affect me in any way if I decided to go that route?

by dwalker2562 from Bakersfield, California. Apr 2nd 2017 Reply


Sara Deere (Saraloveshomeloans)
#1 ranked lender in Kansas - 507 contributions

No!, because you were not the borrower. A reverse mortgage is a non-recourse loan. The servicer will take only the loan balance at the time of the sale. If the house sells for less than the loan balance, the remainder is paid by the government. Each loan has MIP -- Mortgage Insurance Premium that allows the government to pick up the shortage. The servicer will not contact you to make up the difference. The servicer will give you a little over a month to remove any personal items you wish to keep. The sooner the house goes up for sale, the sooner the mortgage balance will be paid. Each month the house does not sell, the mortgage balance will continue to increase.

Apr 3rd 2017
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Skaye is correct. You should not have a tax consequence. Please let me know if you need a good realtor in the area. Roberta 844-771-LOANOr email at windhorseestates@gmail.com

Apr 3rd 2017
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Jericho Cherry (Jerichocherry)
#58 ranked lender in Virginia - 1,107 contributions

Check with a Real Estate Lawyer in your area.

Apr 3rd 2017
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,938 contributions

No. in fact, the Reverse mortgage is designed to just walk away if there is no equity.. It's a "non-recourse" loan and any shortage will not affect the heir's or the estate. No short sale necessary. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Apr 4th 2017
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