Q: Hello! My parents had a reverse mortgage and I'm told an heir can buy the house. Can I negotiate the price?
can I negotiate a price due to the shape it is in? It needs a lot of work. I had it appraised, but it's still too much. Also, who holds the deed to the house. The heirs or the bank. I have seen enter into a deed instead of foreclosure, but I want to buy the house. Any help would be great. Thanks, Lois
A: Typically in a reverse mortgage scenario, the borrower does not Deed the property to the bank. It remains in their name. Deeds are public record, and quickly accessible online. http://www.masslandrecords.com/ Click on your county and search with name or address.
In most cases, when the borrower dies (in this case, your parents), the mortgage becomes due and payable. The Deed would then transfer to the heirs, who would then need to come up with the money to pay off the mortgage - whatever the amount due is at the date of the payoff. That could be done through a refinance. In some situations, you may be able to negotiate a lower payback amount to the reverse mortgage bank. Otherwise, the heirs would need to sell the house in order to pay off the reverse mortgage - or the house would be foreclosed.
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