(MCT)—The following “Ask the Experts” answer comes from Gold River, Calif., estate planning attorney Robin Bevier.
Question: When my father died last year, he and my mother had a reverse mortgage on their duplex. In addition, they had a revocable living trust. I am attorney-in-fact for my mother, who is in a skilled nursing facility and unable to manage her own finances. Now the reverse mortgage company wants me to sign a “clean deed” over to them or they will foreclose on the property. The company told me that if the property was worth less than the reverse mortgage loan, which it is, they would go to the U.S. Department of Housing and Urban Development to get the rest of their money.
My question: Since I am not inclined to sign a deed over to them, and if they foreclose, is there any way the reverse mortgage company or HUD can come after my mother, myself and my siblings for the difference between the reverse mortgage loan and the amount they get from selling the duplex?
Answer: Most of the answer will depend on the actual provisions of the reverse mortgage contract. There appears to be a lot of misinformation and confusion on these mortgages, so it is worth your time to review the contract to fully understand it.
Typically, a reverse mortgage remains in effect unless the homeowner dies or no longer lives in the home full time, as in your mother’s case.
Usually the reverse mortgage company cannot come after the homeowner for the difference in value when the home is sold. However, I strongly recommend you review the mortgage documents to assure that this is the case. There is no liability to you or your siblings individually, nor to you as your mother’s agent under her power of attorney.
©2011 The Sacramento Bee (Sacramento, Calif.)
