There are approximately 775,000 unpaid reverse mortgages in the world today, with the rate of default at a record high, according to a recent story in the New York Times. After the recent housing crash, which demolished equity in houses, and because reverse mortgages are marketed as loans the borrower "doesn't have to pay back", a large percentage of these unpaid reverse mortgages will be inherited by surviving family members.
What this could do is leave family members who have inherited their parent's property on the hook for paying off any reverse mortgage balance not paid by the home's equity upon sale of the property. Although HUD and FHA, which insures 90% of existing reverse mortgages, have safety nets in place which might prevent this from happening there's still great risk that you aren't protected by such measures.
This blog is dedicated to helping folks understand the risks and rewards of reverse mortgages but, more importantly, to help those who have inherited property encumbered by a reverse mortgage. If you're reeling from the shock of discovering that you must pay off an inherited reverse mortgage or suffer losing your parent's home to foreclosure, we're here to help.
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