Q: in a reverse mortgage and the person passes Does the house need to go thru probate.?
The will appoints me as personal representative and states I shall have the power and authority to sell and dispose of any property that i might own at the time of my death. So then could I sell the house to pay off reverse mortgage and split the extra money with my brother?
A: Probate isn't required in Oregon. Probate is an option if you need the assistance of the court to order tasks needed to resolve a deceased person's estate to get done. In the case of a reverse mortgage you may or may not need probate.
The first thing you will want to do is figure out if there is any value in the property that you inherited making it worth your while to try to take over and sell the house. I am assuming that this was a house owned by a parent that put the house under a reverse mortgage and that parent has now passed away. You also have to consider other debts that your parent may have incurred such as medicaid liens (if this is in the State of Oregon call Oregon's Estate Recovery department and ask if they have a claim for a lien) and see if there are property taxes owed which would also be liens. Ask the reverse mortgage company how much the mortgage is. Then investigate by talking to realtors and looking up the property value on line whether the house is worth more than is owed.
Because reverse mortgages start by paying the home owner the value of the house at the time the mortgage is taken out, and then the interest rate is usually higher then the rate of appreciation, it is rare that there is any net value left in the house by the time the homeowner dies. But it an happen. Just be very very careful and do a thorough investigation.
If you and your brother feel that the house does have sufficient value to worth trying to sell it, then speak to an Attorney that understands how to do non-probate sales of real estate. It is possible to secure a realtor to list the house and work with a title company to sell the house in a transaction where the reverse mortgage gets paid off when the sale closes. You can do this without a probate but not all Attorney's know how to do this.
If, on the other hand, you determine that there is no money to realize from selling the house, you may just want to walk away and let the reverse mortgage company take over the house (foreclose the mortgage). Be sure to communicate with the reverse mortgage company. I have see in the past that the reverse mortgage company is happy to let the heirs sign a quit claim deed and release the house so you don't need to worry about it any more.
A: Ms. Reisman is correct that you should investigate whether there is any equity in the home worth saving. Remember to take into account selling expenses to estimate what you and your brother might expect to net out of the sale of the home.
If you think there is equity worth saving, then you need to total up the value of all of your mother's real property and personal property that is still in her name (e.g.,. did not transfer automatically to a named death beneficiary or joint tenant). If all of the real property combined is valued at $200,000 or less and all of the personal property is valued at $75,000 or less, then all of it can be retitled in the names of your mother's heirs according to the terms of her will using a small estate affidavit process. You should hire an attorney to help you with this. It is a fairly simple process so should not be very expensive.
After assets are retitled, then you and your brother can sell them and divide the proceeds according to the percentage shares given to the two of you in your mother's will.
If her property is worth more than $200,000 for the real property or $75,000 for the personal property, or both, then a probate will be required. You will need an attorney for that as well.
The bottom line is either way an experienced probate attorney can assist you with this. The sooner you get started, the better. If you want to save the house you should communicate with the reverse mortgage lender soon to see if you can stave off foreclosure of the reverse mortgage while you are trying to sell the house.
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