Mother To Daughter Transfer

[Mr Rex]

estate taxes have nothing to do with that. just like the real estate taxes owed, etc. those are the expenses of the estate for tax purposes only. a nominal transfer cannot be for a zero amount, that's why they normally put $1.
there has to be a consideration for the transfer, (love don't count) so it cannot be $0.. i'm not a lawyer, used to be a broker, but how can you buy a mortgage which you just inherited?

come on knucks, why is there a "sale price". maybe just some bad wording which is messing you up. it should be just a refi.

It's not a refi. When a person holding a reverse mortgage passes, their heirs have the right of first refusal to buy the property at the outstanding mortgage amount.

 

[Tom D]

It's not a refi. When a person holding a reverse mortgage passes, their heirs have the right of first refusal to buy the property at the outstanding mortgage amount.

the daughter has inherited the house with a FHA reverse mortgage. so you are saying that title passed to HUD on that property when the home owner has deceased? i'm saying that the term "buy the property" is wrong terminology even if HUD is using it if the daughter doesn't own title to the house right now, and HUD does, i will concede to you on this blog that i am not the smart r.e. broker i thought i was a hundred years ago..

and if the daughter has title to the property, right now, from the inheritance, then she cannot buy something from herself. she is just paying off the note, or maybe buying the note back, semantics. the reason daughter has the right of 1st refusal is that she has title. HUD just wants the loan paid off. if i am right, then admit "bad HUD terminology".

respectfully submitted mr rex

 

[Mr Rex]

She did not inherit it. She has to buy it from HUD.

 

[GeorgetownAP]

That's why I am so not a fan of reverse mortgages, and I have appraised my share. I may be totally wrong (not the first time), but when a reverse mortgage is secured by a homeowner - if they pass, the home is now "owned" by HUD, regardless of what any Will states. HUD would use the Will to know who has right of first refusal to pay off the HUD loan and thus take ownership. But, as often happens, the home is underwater, or the loan that needs to be paid off is more than what the inheritor can afford or qualify for - and the daughter, in this case, is out of luck. The loan she is trying to secure would not be a refi - she never had the ability to refi a reverse mortgage. She is trying to secure a new mortgage loan that would, in essence, pay off the reverse mortgage from the home now owned by HUD. Your job, obviously, is to determine market value of home regardless of loans/ownership outstanding. Her hope is that whatever the home appraises that, it is above what is owed to HUD so she can get enough of a mortgage to pay the reverse mortgage amount off.

 

[Tom D]

i talked to a direct lender of FHA reverse mortgages, that's all they do.

1. does HUD own the house? answer was no
2. "if the borrower designates an heir to the property in a will, then the house will be passed down to whoever is supposed to receive it in the will. That family member can sell the house, and pay off the reverse mortgage and keep the difference." there is a required time frame for that
3 "they can refinance and pay off the reverse"
4. "if the person the home is being left to is at least 62 they can get the reverse right away (assuming if some equity there, i guess)
5. HUD can buy your home if no one else will purchase it thru a realtor sale.

i do agree that usually there is no equity left, but in this case the wiil was filed for estate purposes. again, the poster says they are doing a reverse mort refi appraisal for the daughter who inherited the property from her mother. where does the wording "refi" mean a "sale price".

as a matter of fact the balance of the original mortgage may not even be from a previous reverse mortgage, just a normal mortgage when she passed. how did i get sucked into that diversion? i need emergency duct tape.

 

[Noreen]

It's not a refi. When a person holding a reverse mortgage passes, their heirs have the right of first refusal to buy the property at the outstanding mortgage amount.

Yes and they have a defined window of time in which to do this before FHA/HUD commences foreclosure proceedings.

 

[Noreen]

That's why I am so not a fan of reverse mortgages, and I have appraised my share. I may be totally wrong (not the first time), but when a reverse mortgage is secured by a homeowner - if they pass, the home is now "owned" by HUD, regardless of what any Will states. HUD would use the Will to know who has right of first refusal to pay off the HUD loan and thus take ownership. But, as often happens, the home is underwater, or the loan that needs to be paid off is more than what the inheritor can afford or qualify for - and the daughter, in this case, is out of luck. The loan she is trying to secure would not be a refi - she never had the ability to refi a reverse mortgage. She is trying to secure a new mortgage loan that would, in essence, pay off the reverse mortgage from the home now owned by HUD. Your job, obviously, is to determine market value of home regardless of loans/ownership outstanding. Her hope is that whatever the home appraises that, it is above what is owed to HUD so she can get enough of a mortgage to pay the reverse mortgage amount off.

Yes, the one I was involved in with ( Mother passed away, ocean front home) daughter had to pay-off the lien or sell the house before any foreclosure proceedings ( which is pretty quick in New Hampshire).

 

[Mr Rex]

i talked to a direct lender of FHA reverse mortgages, that's all they do.

1. does HUD own the house? answer was no
2. "if the borrower designates an heir to the property in a will, then the house will be passed down to whoever is supposed to receive it in the will. That family member can sell the house, and pay off the reverse mortgage and keep the difference." there is a required time frame for that
3 "they can refinance and pay off the reverse"
4. "if the person the home is being left to is at least 62 they can get the reverse right away (assuming if some equity there, i guess)
5. HUD can buy your home if no one else will purchase it thru a realtor sale.

i do agree that usually there is no equity left, but in this case the wiil was filed for estate purposes. again, the poster says they are doing a reverse mort refi appraisal for the daughter who inherited the property from her mother. where does the wording "refi" mean a "sale price".

as a matter of fact the balance of the original mortgage may not even be from a previous reverse mortgage, just a normal mortgage when she passed. how did i get sucked into that diversion? i need emergency duct tape.

The mortgage is due and payable on the day after the borrowers death. The heirs have the first right to but the house before foreclosure proceeds, but they do not "inherit" the house as if so they would "inherit" any debt incurred by the borrower. Reverse mortgages are non recourse loans as far as the heirs are concerned, they don't inherit the house, they have first right to pay off the mortgage. If they chose not to do so, they may be awarded any excess funds from the sale that exceed the current mortgage balance, but if the sale does not cover the outstanding mortgage balance, they do not "inherit" the debt. So, no, the heirs do not inherit the property in a Reverse Mortgage. They are offered a time limited opportunity to exercise an option on the property as the heirs of the deceased.

 

[Tom D]

yea your right, but since you don't "inherit the house please explain how you can do the following options (from a reverse mortgage lenders web site). how can any of these options work if you didn't inherit the home?
Option 1: Your heirs can sell the property – If your heirs choose to sell the property and the proceeds exceed the value of the home, they can keep the difference. For cases where the proceeds from the sale of the home are insufficient to pay off the loan, then the Department of Housing and Urban Development (HUD) absorbs the difference as long as it is an FHA insured loan. If it is not an FHA insured loan the difference would be covered by the lender. In either case the heirs are not responsible.
Option 2: Your heirs can keep the home – If your heirs choose to keep the home they will have to refinance 95 percent of the home’s value or the balance of the loan, whichever is lower.
Option 3: Your heirs do not have to be responsible for the home – What is great about the reverse mortgage is your heirs do not have to be responsible for the home. If your heirs do not want anything to do with your home after you are no longer living in the home then they will not be responsible for payment of any kind.

 

[Noreen]

In the circumstance I was involved it, it was option 2 ( ocean front home). The others were Option 1.