If the heirs decide to sell, then at the close of escrow, the loan will be paid off…the same as any other mortgage…and the remaining proceeds will go to the borrower or heirs.
If there is no equity, then the bank should be contacted to let them know they can have the property back. Remember that when the bank takes back the property there is no recourse to the property or heirs.
In either situation, the bank should be immediately notified. They will be more likely to work with you, allowing ample time to market and sell the property…Remember, communication is the key.
One last tip: many times I get calls from families or realtors asking what is owed on the property. Always refer to the last reverse mortgage statement. The statement will give you that amount. The deed of trust will always have an amount higher than the actual loan amount…and that is not the amount owed back.
We are here to educate, advise, and help you understand if a Reverse Mortgage might be right for you. Please follow us on Facebook or, for more informational articles and videos, check out the rest of the blog.