I know we have discussed reverse mortgages. I hate them btw.

Situation is that we know someone who took one out years (12-15) ago. I believe there was a lien that was paid off by the rmc. Lets say the home was worth $500K 12 years ago. The lien was $150k. The owner over the next 10 years received $260k in payments. The rmc also gave the owner another $70k in a line of credit. Then the (rmc) gave the owner another $125k probably because the property value went up. So in May of last year the rmc sent a letter stating they have met the maximum pay out on the rm and turned it over to hud.

The final statement before the rmc turned it over to hud stated they had paid out around $400k. The $70k pay out for line of credit was not shown on that statement. But there was separate one showing that.

We do not see any docs showing the payment of the lien when the original rm was taken out.
Guessing that would only show in the original docs. Not sure though.


At the time the rm ended (May 2022) the house value was close or slightly above $800k

I guess I would like some comments on this very real mess that we trying to understand. I know there are details I do not have at this point. Thanks guys and gals.

Maybe time to get a lawyer involved?

Liens should be searchable in the county deed records.

If you have the contract to read, I'd start there but maybe a CPA could help.
Based on reading online they usually loan out a maximum of around 60% of the homes value.

I have known families that have been able to sell a home that has had good appreciation and pay off the mortgage with something left over.
I wouldn't count on that in many cases as I suspect they ding the owner and heirs a good amount for the interest and various other fees.

Maybe post again when you find the answer to help the rest of us understand the real situation.

The description of the problem is unclear.

Thanks guys. I appreciate the info.

As far as a specific question. Not sure I have one. I know some here have experience or knowledge as was looking for comments based on what I posted.

Having said that a few things do come to mind.

What is hud's roll in the scenario once the rmc has paid the home owner all they are willing to pay?

And once they are done paying, then what? What for the owner to die to get their money back?

What is the rmc end game. How does this really conclude?

"What is the rmc end game. How does this really conclude?"

That's what you need the contract for, to see the terms and conditions.

If HUD has a role in the situation, that to me is not good. HUD is usually involved when a person or company fails to pay a governmentally insured mortgage.

Get a lawyer NOW if you are not well-versed in mortgage contracts and servicing.

With a Reverse Mortgage, HUD gets the loan, when the lender believes there is no equity left in the house or there is a default or death, the list goes on, but these are the most common.

HUD then assigns the loan to a servicer.

Some of these servicers are a real piece of work. Some are OK, some are incompetent and some are crooks.

Getting ahead of this now is much easier than trying to stop a foreclosure.

I am a real estate lawyer and have intricate knowledge of reverse mortgages. Send me an email with your number and we can chat

quote:

Originally posted by Timdogg6:
I am a real estate lawyer and have intricate knowledge of reverse mortgages. Send me an email with your number and we can chat

Thanks Timdogg. Done.

Plus interest that has been accruing since day one with that money when it went out the lenders door and the homeowners have not had to make any payments all these years. So principal + all that accrued interest is a big number. And may well exceed the value of the home today. The servicer should certainly be able to provide an accounting.