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Can Children Be Held Responsible for a Reverse Mortgage of Deceased Parents?

Tips and tricks for handling reverse mortgages after the death of your parents.

On the surface, a reverse mortgage sounds like an excellent idea. People over the age of 62 can receive a monthly loan payment as long as they continue to live on their property. This money can supplement Social Security or pension payments so that the senior can continue to enjoy a high quality life. It does not need to be paid back until she moves or dies. In the latter case, heirs are responsible for paying back the reverse mortgage. Seniors should think carefully about this before entering into a reverse mortgage agreement.


When a senior citizen is receiving a check for a few hundred dollars every month, it is easy to lose sight of how much his heirs will end up owing after his death. The longer she stays in the house, the greater the debt owed. After death, children or other heirs are held responsible for paying back the debt.


After the death of their parents, heirs have up to one year to resolve the debt. There are several options. The heirs, if they have the money, can pay back the debt in full. More commonly, they sell the house to cover the debt and keep any proceeds over the amount owed. Heirs can also sign the house back over to the lender if the debt is greater than the worth of the house.


There is no threat of foreclosure while the homeowner is alive. She does not have to pay back the loan while she is living in the house and is considered the owner. However, if his heirs refuse to pay back the reverse mortgage or are unable to do so within a year, the bank can foreclose on the house just as they would if a homeowner defaulted on a traditional loan. These proceedings have a negative effect on the heirs’ credit rating as well as causing them to lose the house.

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