Does the family have any requirement to pay a debt on their late mother’s reverse mortgage?

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Does the family have any requirement to pay a debt on their late mother’s reverse mortgage?

My widowed mother passed recently and owes $160,000. The house value

is about $130,000. No one wants to buy it for 160,000, so we will just give it to the mortgage company. Is there any way they can come after money from the family? Her relatively small insurance has no cash value and is being processed to distribute to the beneficiaries. Do I need to take any legal action to protect ourselves?

Asked on March 17, 2016 under Real Estate Law, Idaho

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, the family is not liable for the reverse mortgage, though her estate may be: that is, the bank could get whatever money or assets was left after your mother passed (e.g. insurance proceeds if they went to the estate, instead of directly to name beneficiaries; anything left in a bank account; her car, if she'd had one; etc.) to pay off any balance of the loan above and beyond the value of the house. So you could end up getting nothing from our mother, but that is the worst it would be--you will not have to go out of pocket for a debt which you did not incur or co-sign.


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