Reverse Mortgage Impact on property?

Started by DennisG7 • 3 replies • 266 views

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DennisG7 (Georgia)
Posts: 155

Posted:

We have come to learn that a HOA member is completing a reverse mortgage on their pproperty. Does anyone have any idea as to the possible impact on ownership and the rights held by the company involved with reverse mortgage?? Upon the death of the current owners can they turn this into a lease property? We have no expierence with this and have wondered exactly what rights the reverse mortgage provider may have. We are a GA POA.
dennisg7

JohnC46 (South Carolina)
Posts: 14,265

Posted:

While no expert, I do not see the reverse mortgage holder having anymore rights then a 1st, 2nd, etc. mortgage holder. If the terms are not met, as with any mortgage holder, they could take possession of the home though I understand it easier for a reverse mortgage holder to do so.

BillH10 (Texas)
Posts: 1,217

Posted:

If the reverse mortgage holder becomes the owner upon the death of the present owners, their rights, and responsibilities, are exactly those of any other owner in the community. Can they lease the property? Yes, if your documents permit properties in the association to be leased.

I would not worry about this as:

1) there is nothing the Association can do to prevent or modify the terms of the reverse mortgage.

2) the reverse mortgage documents I have seen grant the heirs or estate a generous period of time to pay off the loan or sell the property--which they generally do as property tends to appreciate and no one wishes to leave money on the table.

2) the reverse mortgage holder does not wish to own property, they are in business to make money making loans. I expect they would sell the property ASAP if it came into their possession.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By BillH10 on 04/06/2023 10:46 AM
If the reverse mortgage holder becomes the owner upon the death of the present owners, their rights, and responsibilities, are exactly those of any other owner in the community. Can they lease the property? Yes, if your documents permit properties in the association to be leased.

I would not worry about this as:

1) there is nothing the Association can do to prevent or modify the terms of the reverse mortgage.

2) the reverse mortgage documents I have seen grant the heirs or estate a generous period of time to pay off the loan or sell the property--which they generally do as property tends to appreciate and no one wishes to leave money on the table.

2) the reverse mortgage holder does not wish to own property, they are in business to make money making loans. I expect they would sell the property ASAP if it came into their possession.

I agree.

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