• Question
  • children after reverse mortgage holder dies

    Asked on 1/15/2011

    My grandmother had a reverse mortgage and recently passed away. The terms said that her family had one year to sell the house and pay the mortgage off. But, a month after her death, home insurance is due, and the insurance company says they can't insure the house because the children don't own it. The mortgage co says insurance must be kept. It is like a catch 22.... what can be done? Also, there is no estate that I am aware of. If an estate were set up somehow, would this estate now be responsible for all her medical bills? Would it end up being better to not make an estate and let the mortgage company forclose on the home and then let them try to evict the children, and this way the children would not be liable for medical costs?

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  • Categories: Reverse Mortgages, Reverse Mortgages & Heirs

Answers

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  • NewRetirement User

    75 year old from Houston, TX

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  • Generally speaking, the insurance company should be able to continue the insurance coverage through the period of the sale of the property. Even if they cannot however, the reverse mortgage has already come due with the death of the owner, and the resulting insurance status should not affect the one year period to resolve the mortgage.

    We cannot offer advice as to how best to proceed with estate planning, but generally speaking, home foreclosure is a last resort option, commonly used only when the property has no more equity left in it at the conclusion of the reverse mortgage. The decision as to whether or not to permit a foreclosure is one you should take only after all due deliberation, and depends on the circumstances you find yourself in.

  • Login to rate this answer:   Answered on 1/17/2011
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.