Sunday, March 30, 2014
A growing number of baby boomers are confronting a bitter inheritance.
Reverse mortgages have been a constant pitfall for older borrowers, but their survivors are increasingly being threatened by reverse mortgage companies to pay the mortgages in full or face foreclosure. And most heirs don’t know that surviving family members are supposed to be offered the choice to settle the reverse mortgage for a percentage of the full amount, in some cases 95% of the home’s current value.
Some heirs say that lenders are moving to foreclose just weeks after the borrower dies while other heirs say they become stuck in a bureaucratic maze as they try to figure out how to keep the family home.
See Jessica Silver-Greenberg, Pitfalls of Reverse Mortgages May Pass to Borrower’s Heirs, The New York Times, March 26, 2014.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) and Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.