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Reverse Mortgage House Surrender - Next Of Kin

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Jaaam

Junior Member
The state my father lives is Pennsylvania.

My father is in poor health & can no longer afford his reverse mortgage payments or property taxes for his home He has exhausted all financial aid options to make the payments possible and has not paid out any payments in a few months. He would like to surrender his house and told the bank, but they will not accept the house until he pays the property taxes to date & fixes up/empties the house.

My father has no money & can hardly walk. He receives a small amount of social security which he puts only towards the house, but it is still not enough. He's incapable of meeting the demands for surrender financially and physically in terms of fixing and clearing out the house. I live across the country from him and also do not have the financial means or time away from work to take on this enormous task. He has decided he is going to abandon the home with the key in the door & tell the bank the house is theirs, as is. He just wants to be done with it so he can have money for food again and try to pick up the pieces and live.

I have concerns. Even after surrendering the house, is he still required to make payments for the reverse mortgage? I am concerned giving up the house alone will not clear his responsibility of what he owes. If he continues to owe for the reverse mortgage he still won't be able to pay, whether he has the house or not. As I am his next of kin I would like to know if in this situation where I will lie in responsibility for his debt when he passes. My concern is that if he surrenders the house, but still continues to owe on a huge debt he cannot pay, that I will inherit this debt in the future. If that's the case, I will no longer have a house to sell to clear the debt as he will have already surrendered it. Will I be responsible? Please help!

Thank you!
 


Zigner

Senior Member, Non-Attorney
Your father's estate, not you, will be responsible for his debts.

Can you explain why your father has payments to make on a reverse mortgage? My understanding of reverse mortgages is that they pay the homeowner a certain amount each month and then they get the house once the owner passes away.

ETA: Just walking away from the house doesn't relieve him of his responsibilities, no matter what form of mortgage he has.
 

FlyingRon

Senior Member
Something is not being described right here. You don't make payments on a reverse mortgage. He does have to pay the taxes but he doesn't have any obligations to the reverse mortgage until he gets to the point where he is no longer able to reside in the house. You should endeavor to find out just exactly what is happening here.
 

Jaaam

Junior Member
Your father's estate, not you, will be responsible for his debts.

Can you explain why your father has payments to make on a reverse mortgage? My understanding of reverse mortgages is that they pay the homeowner a certain amount each month and then they get the house once the owner passes away.

ETA: Just walking away from the house doesn't relieve him of his responsibilities, no matter what form of mortgage he has.

Thanks for the information! It is possible that he has described things to me in the wrong way, as he often does. It's hard for me to get full information from him. I know that he can't afford the property taxes, utilities, and payments to a personal bank loan he took out to help cover all these costs. So it must be the fact that he is not able to pay the property taxes that is affecting his ability to keep the house right now and also eventually surrender the house. The bank said he must pay up all property tax before they will accept the surrender of the house. He is behind on several of those payments.

My father has no will as he has no possessions or assets to pass along. So I had assumed being his only daughter that all of this debt will default to me if it was not squared away before he passes.

Thanks for taking the time to answer! As you can see, I know very little about these things and am so concerned I have found myself in the middle of a world of grief.
 

LdiJ

Senior Member
Thanks for the information! It is possible that he has described things to me in the wrong way, as he often does. It's hard for me to get full information from him. I know that he can't afford the property taxes, utilities, and payments to a personal bank loan he took out to help cover all these costs. So it must be the fact that he is not able to pay the property taxes that is affecting his ability to keep the house right now and also eventually surrender the house. The bank said he must pay up all property tax before they will accept the surrender of the house. He is behind on several of those payments.

My father has no will as he has no possessions or assets to pass along. So I had assumed being his only daughter that all of this debt will default to me if it was not squared away before he passes.

Thanks for taking the time to answer! As you can see, I know very little about these things and am so concerned I have found myself in the middle of a world of grief.

You are not and will not be responsible for your father's debt. As previously stated, your father's estate would be responsible. If your father has no assets and therefore will have no estate, (except perhaps the house) then his creditors will be SOL at that point.

Your father can walk away from the home. Technically, he would still owe the debt, but since his only income is Social Security, and that cannot be attached for consumer credit defaults or judgments he is judgment proof.

Or, your father can continue to live in the house until someone (either the mortgage company or the municipality) forecloses on him and then he can move out, or he can go ahead and move out sooner than that.
 

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