By Admin on Sep 1, 2010 in Financial Services
My Dad just died. He lived longer then his money lasted. They have two homes, one with a reverse mortgage, the other with ,000 remaining on a second my Dad took out, without my Moms knowledge. Bottom line is he left her broke, no life insurance policies to speak of. And only 00.00 a month from social security. She doesn’t want to sell either house but was thinking about renting out the one with the reverse on it. Can she do this, she’s got no money coming in from anywhere, I’m afraid this stress is going to kill her. She lives in Palm Springs, CA..
also, there’s about ,000 left in the reverse account. The homes are worth anywhere from 0,000 to 0,000, depending on the economy, which sucks. Thank you for any help.
Her name was on there with his name… He forged it.
If your mother is not on the reverse mortgage it is due now, she has no choice but to sell.
Also, she has to live in the property, as soon as she vacates it the mortgage will be called due.
Landlord | Sep 1, 2010 | Reply
No….you are not allowed to rent out a house with a reverse mortgage.
How did your Dad take out a 2nd mortgage without your mother signing the note? Was she not on title? If your mother and father were both on title as either joint tenants or as community property there is no way legally that he could take out a 2nd TD without her signature on the note. If your mother didn’t sign the note the 2nd TD is not valid. If your father forged her signature that also would make the 2nd TD invalid.
Have your mother talk to a real estate attorney.
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since he forged her signature your mom should be able to have the 2nd TD reversed. Contact the 2nd trust deed holder and tell them that she did not take out the 2nd TD and their lien against the property is invalid. Find out who the title company is that insured the property for the 2nd TD. You might have to go to court and sue the 2nd TD lender for quiet title. Hopefully the 2nd TD lender and the title company can work it out without going to court.
Forgery is the most common claim that title companies have. I would consult an attorney. Ask him if you should stop making payments on the 2nd TD because of the fraud.
Glenn S | Sep 1, 2010 | Reply
No, if you rent a house with a reverse mortgage, and the lender finds out (which he will), the loan will be called. That’s very clearly spelled out in all your documentation.
Like someone else said, if your mom was an owner of the other house, how could your dad have taken a second without her knowledge? If it was a rental property it may have been in your father’s name only, but then if any loan is only in his name, his passing makes that loan due.
Can she live in the house with the reverse mortgage..is her name on the reverse mortgage? She could then rent out the other house, and maybe get enough rent to make the mortgage payment and supplement her income.
But the answer to your question is no, she can’t rent the house with the reverse mortgage.
Debdeb | Sep 1, 2010 | Reply
No – The house must be the principal residence of the reverse mortgage holders. But is there somewhere else she can live for cheaper then the house with the RM on it?
Depending on her age, it might make sense to call the lender and have the LOC turned into a tenure payment. This will at least give her some monthly income.
If Dad really did forge Moms name, there might be recourse to the bank, especially if a bank officer or attorney witnessed the forgery.
eaglerock9 | Sep 1, 2010 | Reply