If we live in a different state, are we obligated to payback my mother-in-law’s reverse mortgage?

UPDATED: Sep 30, 2022

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If we live in a different state, are we obligated to payback my mother-in-law’s reverse mortgage?

She passed last year and now we are dealiing with mortgage company. My husband was her beneficiary and today I was served with papers from the mortgage company.

Asked on May 20, 2017 under Real Estate Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You are not personally obligated to repay it unless you agreed to repay it: e.g. you co-signed or guaranteed the loan.
Her estate, however is oblitated to pay it: the lender can go after the estate for any unpaid balance and, if there is any money, potentially get it. Anything the lender (or other debtors) get is money that will not be inherited by you. Similarly, since a reverse mortgage is a mortgage, IF the loan is not paid in full, the lender can foreclose on the house; if you want the house, you'd have to pay off the loan, but you can refuse to pay and while they can get the house, they can't go after you personally.
In short, you can potentially lose some or all of what you might have otherwise inherited (e.g. the house; her money in the bank or a brokerage account), but you do not have to go out of pocket; the most you can lose is the inheritance, so long as you did not agree to be bound by the loan.

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