California Reverse Mortgage & Foreclosure Lawyer
Probate Issues with Reverse Mortgages & Related Foreclosures
Probates with reverse mortgages are very tricky because reverse mortgage servicers are very difficult to work with and there are very serious time constraints. (i.e., You have to hurry if they start foreclosure.) The reverse mortgage servicers are right behind student loan companies as the worst and most crooked lending operations. They will immediately try to start foreclosure of the property as it adds significant fees and costs to line their pockets. (Sorry I hate them.) That said, within sixty (60) days of the borrower’s passing, you can request an extension of time to file probate and sell the house. They are required to give two (2) sixty (60) extensions. To qualify for the time extensions, reverse mortgage servicers require proof of probate filing and further require a real estate agent to remit a sale listing agreement for the property. Please, whatever you do, do not wait around, contact my office immediately for your free consultation to preserve the equity in the house.
The probate can be filed quickly and the requests for extensions remitted with a listing agreement thereby avoiding foreclosure. There is an exception that, in certain instances, a surviving non-borrower spouse may be able to remain in the house if the original loan documents allow this very narrow exception. I will be happy to assist in the determination. Call me NOW for your FREE consultation.
Here are the steps if the Probate involves a house with a reverse mortgage:
- If there is a reverse mortgage on the property and the house is held in the individual’s name (no trust), then probate is required. Call me NOW for your free consultation.
- Within the first 60 days after death, you have to submit a written request (usually by fax) requesting an extension of time to probate the estate. At this time, please request a checklist from the lender of their requirements for granting an extension. Call me NOW for your free conultation; I can help.
- You have to follow up with the lender and confirm the extension of time to sell the house was approved. Unfortunately, they will not provide written confirmation and most will not provide an email address. At this time, you will also have to provide a listing agreement to the lender illustrating that the house will be listed for sale. This is not a realistic requirement because until you are appointed by the Court you have no standing (a fancy legal term for no authority) to sign a binding listing agreement. Call me NOW for your free consultation directly with me the probate attorney; I can handle everything.
- Simultaneously file the Petition for Probate, have your probate bond pre-approved (a bond is generally required when there is no will to make sure you do not run off with the money) and start preparing the house for sale so, when you are appointed, you can move to sale quickly. You can continue to live in the house while it is listed and sold.
- If the house is already in foreclosure, you may want to also file for Special Letters of Administration but please do not wait that long. Call me NOW for your free consultation with The Probate Guy; I can handle everything.
- You have to request full lAEA authority as there is not enough time if you only qualify for limited IAEA authority. Full lAEA allows you to sell the house without seeking Court approval however a bond is usually requried. Full IAEA authority is a streamlined approach that is the only way to sell the house within a short time frame. Call me NOW and I will explain this to you.
- The house is listed as soon as Letters of Administration have been approved by the Probate Court. Once sold, the money is held in an interest bearing account pending the Probate Court’s final order for distribution.
What Is a Reverse Mortgage?
If you are 62 years old or older, a reverse mortgage lets you use the equity in your home essentially for free until your demise. Is that a good idea? Let me explain a little bit about reverse mortgages: what they are, why people get them and questions you should ask before you decide to apply for one. Most important of all, if a reverse mortgage is present in a probate proceeding (a homeowner has died and there is a reverse mortgage on the house), call me immediately. We have to act quickly to keep the lender from foreclosing on the home. Probate is absolutely necessary. Call NOW for your FREE consultation directly with the attorney.
How Do Reverse Mortgages Work?
If your mortgage is paid off or mostly paid off and you’ve built up substantial equity in the home, you can borrow against that equity and receive cash in exchange, either in one lump sum, through monthly payments or as a line of credit. Instead of making mortgage payments, you receive cash from the lender and do not pay it back until your demise. This is why they are called reverse mortgages. Every month you borrow against the equity you have in the house to cover the mortgage. Also, every month you increase the balance on the loan by the loan amount plus interest.
You must be living in the home and stay there to get a reverse mortgage also known as a Home Equity Conversion Mortgage (HECM). If you (and your spouse) move, then the reverse mortgage stops and the loan comes due. The loan also comes due when the last borrower (meaning you or your spouse) dies. In most cases, it’s necessary to sell the home to pay off the loan. The amount due could potentially be greater than the current value of the house. Call me NOW for your free consultation and let’s figure out if probate is necessary.
Why Do People Take Out Reverse Mortgages?
For the money of course. Some people get reverse mortgages so they will have money to enjoy their retirement. Others need the cash to cover large medical bills or to help out an adult child or grandchild with a personal loan. Others have to take the reverse mortgage so that they can afford to stay in the house or make necessary repairs to the house. You don’t have to make any principal or interest payments on a reverse mortgage while you stay in the home; you only have to keep up the taxes and insurance in most cases.
What Are the Downsides to Reverse Mortgages?
There are quite a few and they are worth thinking about before you sign up for a reverse mortgage.
You could use up all the equity in your home and your heirs will be forced to sell the home to pay off the loan or wind up in foreclosure. Reverse mortgages are not assumable.
As you eat up your home’s equity with a reverse mortgage, you reduce the overall value of your estate. One’s home is typically the most valuable part of an estate. But a house is only valuable if it has equity in it; otherwise, it is an enormous liability you are passing on to the next generation, who will probably have to sell it.
Call The Probate Guy for Help With a Reverse Mortgage Probate in California
Reverse mortgages can be valuable for homeowners and they can be dealt with appropriately in probate if you have an experienced probate attorney help you who knows what he is doing. Call me NOW at 714-522-8880 to get your free consultation directly with me the probate attorney. I help people with probate in Southern California, including but not limited to Anaheim, Buena Park, Cerritos, Compton, Downey, Fullerton, Gardena, La Mirada and Orange, Riverside, San Bernardino, and San Diego I can work with you entirely over phone, mail and e-mail, so you won’t have to worry about traveling to my office or going to court to get your probate done. Call NOW for your FREE consultation directly with the attorney.