As more seniors turn to reverse mortgages, their adult children might well be puzzled or concerned about what will happen to that debt when one or both of their parents eventually dies. At that time, questions about how to pay off the loan will need to be resolved -- and relatively quickly.
If the borrower was married, the surviving spouse might be able to remain in the home even if he or she wasn't a co-borrower, according to Sarah Mancini, an attorney at the National Consumer Law Center, a nonprofit advocacy organization in Washington, D.C.
That's important, Mancini explains, because some borrowers remove a younger spouse from their home's title to secure a larger reverse mortgage, leaving that younger spouse vulnerable to eviction and foreclosure after the older spouse's death.
The rules that affect surviving non-borrower spouses are complicated, and surviving spouses and heirs may need to consult an attorney to interpret their rights and options if the spouse wants to continue occupying the property.
"There are serious legal issues," Mancini says, "and possible grounds for a legal challenge if the lender forecloses while there is still a surviving spouse."
Read more: http://www.bankrate.com/finance/mortgages/pay-reverse-mortgage-after-parent-dies.aspx#ixzz3ekV3iYqn
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