Will an heir be liable for money owed to house that is currently in reverse mortgage? 6 Answers as of March 16, 2011

My mother has a reverse mortgage. She will probably have no equity or even possibly negative equity in her house when she passes away. She has a Beneficiary Deed to leave the house to myself and my brother. Question if she owes money on the house when she passes will we be liable? My understanding is that the house would simply go to the bank, is this the case?

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The Law offices of Cheryl L. Sommers
The Law offices of Cheryl L. Sommers | Cheryl L. Sommers
No,an heir is not liable, you are correct in your statement that the house would just go to the reverse mortgagor.Without you personally obligating yourself on the reverse mortgage (ie; you signing a note promising to pay any deficiencies), you are not liable. It is possible that your mother's estate may be liable, though. I recommend visiting a respected Estate Planning attorney. I'd be more than happy to help you. Hope that answers your question!
Answer Applies to: California
Replied: 3/16/2011
Law Offices of Brian Chew
Law Offices of Brian Chew | Brian Chew
Yes, if the property is still in the estate when your mom passes and there is no equity in all likelihood you will just sign it over to the mortgage company with no further liability to the estate. However, her estate could still be subject to the high costs and delays of probate even though the property is worthless and your Mom has a valid will. You may want to consider setting up a living trust for your mom to avoid probate.
Answer Applies to: California
Replied: 3/16/2011
Apple Law Firm PLLC
Apple Law Firm PLLC | David Goldman
No, but whether the estate will be responsible will depend on the terms of the reverse mortgage. Generally they are not able to collect more than what is available from the home.
Answer Applies to: Florida
Replied: 3/16/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
No, Reverse Mortgages are an excellent tool for providing an older person with supplemental income from their biggest asset. The benefit is that heirs amd the older individual do not have to pay it back, unless the heirs want to keep the house.
Answer Applies to: New Hampshire
Replied: 3/16/2011
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