Can my mother do a reverse mortgage on our home?
My Mother did a reverse mortgage on her home, what I didn't realize was that my name is on the home as owner also, and I didn't sign anything for the reverse mortgage. I thought that the youngest owner had to be 62, and I am just 51.
I don’t know how this could happen.
In order to take out an FHA-insured HECM loan (Home Equity Conversion Mortgage, the most common kind of reverse mortgage) the youngest borrower must be at least 62. The lender requires all owners to sign the mortgage application and note, and in fact, the age of the homeowners is critical in determining the amount of the loan. The older you are, the more you can borrow.
Before a reverse mortgage can be obtained, a full title search is always done on the home. If your name is on the title or deed, you will be listed as an owner. Perhaps the deed with your name on it was never recorded? I suggest you check the public records for your municipality to see how the deed is recorded. If your name appears, contact an attorney or the title company to have your name removed.
Great answer Barbara,
Yeah, usually the requirement is that the youngest borrower must be at least 62. It is uncommon, but not impossible.
I work for an in-home/aging in place blog and we are currently writing a series on paying for eldercare. Our latest article is on financing reverse mortgages. If you are interested in learning more, check out http://www.rightathome.net/seniorhomecare.
Additionally, if this house is your primary residence, you should have had to sign a "homestead" rights waiver of some sort, depending on the state you reside in. Basically, it is an agreement with the bank that, as an owner residing at the property, you agree not block forclosure or eviction proceedings should they become necessary to collect the debt. Sounds like the lender really dropped the ball on this one. If you do not agree to the reverse mortgage, it is possible that you can use these oversights to cancel the contract.
There are no dates as to when this question was asked, but I thought I would respond. In order for your mother to do a Reverse Mortgage on your home you would have to quit claim deed your home entirely over to your mother. That is the only way that a Reverse can be done without both homeowners being 62 or above. If that is not something you are willing to do than you need to talk to your mother about that. I have had several clients who one is not 62 and still wanted to do a Reverse, many of them have life insurance or take out an additional policy to make sure that if something happens to them there would be enough funds to pay off the mortgage so that the other surviving spouse or co owner would still be able to stay in the home. In many situations that person would no longer want the home and would want to sell it. You can also refinance a Reverse Mortage when you turn 62, lots of different things that can be done, it is important that you are working with someone who is knowledgeable and not trying to sell you something but educate you on all options available.
I thought that the youngest owner had to be 62, and I am just 51.
Something is wrong and doesn't make sense, because you can't possibly be on Title - they just don't make a hugh mistake like that. Are you sure you're not looking at an older Title? If the current recorded Title has both of you listed, that tells me the Title associated with the Reverse Mortgage didn't get recorded properly. To correct it, review the anomoly with the Escrow Officer and she'll resolve it.
I am a Reverse Mortgage Specialist. Yes a Reverse Mortgage can be done if one of the borrowers is 62 or older. However there are some risks in doing so. First Title would have to be completed in only the one borrowers name, that can be done by having a quit claim deed prepared. Most states are marital property states and not trying to provide any legal advice, and I would advise to check with an attny or title company, however in most circumstances all property should revert back to the spouse if something happened to the older spouse. Once the other spouse turns 62 you can refinance a Reverse Mortgage as well to add them to the title again. If something was to happen to the spouse in whom the Reverse Mortgage is titled the loan would come due so many homeowners rely on life insurance as a form of "Insurance" to protect against that, but once again if the spouse is then 62 a refinance could be considered. I would advise contacting a Reputable Reverse Mortgage Specialist to ask more specific details of this as well. They are a great program and I have done several with this situation and I have had several wait until they both are 62, it has to be an informed decision!
I have seen this happen many times. If your name was on title the last thing you want to do is remove your name from title for the reverse mortgage company to have unlimited access to the property which you are one owner. I have one NEVER - and that is NEVER remove your name from title. If you call me I am happy to help you figure it out (no charge) Sandy Jolley, Reverse Mortgage Suitability and Abuse Expert