Forced to sell house with Reverse Mortgage | In NewRetirement's Questions & Answers Forum

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QUESTION:
Forced to sell house with Reverse Mortgage
My Father, who is a widower, has a reverse mortgage and is going into a assisted living home do to alzhiemer's. I have heard if he has to stay in assisted living for more than 12 months the RM will be called and the house will have to be sold within 12 months. If that is true the house would have to be sold within two years after entering the assisted living home. Is that correct?
	asked by KLF, 7/4/2008
Categories: Reverse Mortgages, Financial Planning for Retirement, Debt and Mortgages, Reverse Mortgage

ANSWERS:
	Answered by: Editorial, 07/07/08 Overall Rating: Be the first to rate it.
The exact timeframes for how quickly the Reverse Mortgaged home must be sold when the owner has moved to an assisted living facility may vary according to the exact terms of each loan. However, you are generally correct. The home must be sold when the owner no longer occupies the home. The loan ends when the homeowner dies, sells the house, or, depending on the loan conditions, moves out of the house for 12 consecutive months (for example, to go into an assisted living home or due to physical or mental illness the borrower is not able to live in the property on which the loan has been taken. At that point, the reverse mortgage can be paid off with the proceeds of the sale of the house, or if the borrower has died, the property can be refinanced by the heirs of the homeowner's estate with a regular mortgage. If the proceeds exceed the loan amount including compounded interest and fees, the owner of the house receives the difference. If the owner has died, the heirs receive the difference. For cases where the proceeds are not sufficient to pay off the loan, then the bank (or insurance which the bank has on the loan) absorbs the difference. Login to rate this answer:
	Answered by: The Reverse Mortgage Expert, 08/22/08 Overall Rating: Be the first to rate it.
Yes, what you are saying is correct except you also have the option to get a forward mortgage for the home to pay off the reverse mortgage and once the lender is aware that he is no longer occuping the home, you would have to be activiely looking for a way to either refinace the loan into a forward or have the home listed with an agency. The intial paperwork that your father signed should have the answer to your question. If you need any additional help, please feel free to to contact me. 800-987-1225 Login to rate this answer: