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what happens to the home after the owner dies and the fha pays off the reverse mortgage

by willhe3.1809 from San Bernardino, California. Mar 20th 2016 Reply


The FHA pays off the mortgage?! lol.. No such thing.. owner dies, house and debt go to the heirs/estate of the deceased unless there was life insurance to pay off that mortgage. Since most people consider life insurance a frivolous expense, there probably ain't none. House payments need to be made, house needs to be put up for sale unless there is a bunch of money running around that the heirs can put together to pay off the reverse mortgage..

Mar 20th 2016
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Jesse Stroup (jessestroup)
#4 ranked lender in Idaho - 593 contributions

The heirs will need to speak with the mortgage lender.

Mar 21st 2016
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Lorne Harvey (lorneharvey)
#80 ranked lender in Washington - 431 contributions

Reverse mortgage is same as a forward mortgage. The family will have to work with the mortgage company. Many times the home is sold and the lender is paid in full. (FHA does not payoff the mortgage)

Mar 21st 2016
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

If the owner passes, then the estate/heirs have to make a decision to either buy the home and keep it, sell it and keep any equity, or give it back to FHA.. if you decide to give it back to FHA, then FHA will sell the home the proceeds will go to FHA.. If you wish to keep it, you must pay off the loan.. if you decide to sell it, then FHA will give you ample time to sell the property.. if you need an extension, they most likely will allow you the needed extra time as well. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Mar 21st 2016
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R. Jocelyn Anderson (labrokergirl)
#1268 ranked lender in California - 38 contributions

The heirs have up to 2 years to pay off the reverse mortgage through refinancing or sale of property. If there's enough equity to pay off the reverse mortgage after sale of home, the heirs will keep the change.

Mar 21st 2016
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Sara Deere (Mortgagequeen2)
#1 ranked lender in Missouri - 584 contributions

The heirs will need to speak with the mortgage servicer of the loan, the company that is sending out the statements connected to the reverse mortgage. Most heirs sell the home. The clock starts when the death certificate was issued, so get that to the servicer as quick as possible. The heirs will be provided time, at least thirty days, to get things out of the house in which they want to keep or donate. If the current loan balance is more than what the house sells for, then FHA does provide the difference. Every reverse mortgage loan has mortgage insurance premium, which works the same a PMI on the forward side and protects both lender and borrower. With reverse mortgages there is NO DEBT TO THE HEIRS--IT IS A NON-RECOURSE LOAN. If the current balance is less than what the home sells for, then the excess is given back to the estate. One can use life insurance to pay the current balance, and the full balance will be required to be paid. An heir can also decide to purchase the home, if they wish to live full-time in the home.

Mar 21st 2016
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