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David Kennett
David Kennett, Attorney
Category: Estate Law
Satisfied Customers: 27689
Experience:  25 years practicing attorney
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My mother recently died and she had a reverse mortgage. The

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My mother recently died and she had a reverse mortgage. The amount owed is almost twice what the condo is worth. I have lived in the condo with my husband for the past 3 years and it is our primary residence. We are paying the maintenance and all bills. We have just received a letter from the bank addressed to my mothers estate representative letting us know that they have been made aware of my mothers death recently and would like to handle the financial relationship appropriately and would like the death certificate. My question is - what are our rights - and how can we handle this situation in our best interest and not the banks. We would like to continue living in the condo. My mother did not have a will.
DearCustomer- If the deed is still in your mom's name, which I assume it is, and there was no will then the property will likely be taken by the bank to cover at least part of the mortgage balance. The only way you could keep the property would be to pay off the mortgage through a refinance however if the property is that far "under water" then it would make no sense to pay twice the value just to keep it and no bank would refinance for twice the value. Since there is no equity in the property you wouldn't have anything to inherit even if there was a will or an estate since the bank has first priority. So your only "rights" are as a month to month tenant and once the bank forecloses they would have to right to evict you with a 30 day notice. You are not personally liable for any expenses on the condo there would be no other action taken against you after you move, either from the condo association or the bank but you have no rights as to the property or to stay there indefinitely. You have no obligation to deal with or cooperate with the bank unless the bank is agreeable to allowing you to stay and make payments on the mortgage.
Customer: replied 4 years ago.

How about offering the bank a reasonable (lowball) all cash offer? And if we do that - how should we time it to our best advantage?

You can certainly do that. I'm not certain what you mean by "timing" but the sooner you can work with the bank the better. Once they file a foreclosure action it will probably be too late. If the house is that far "under water" you may want to offer what they would expect to get at an auction which is about 65-75% of actual market value. It would be up to the bank whether to accept but if they do they would be saving themselves the cost of a foreclosure and an auction sale.
Customer: replied 4 years ago.

OK, So the letter from the bank says that they will make every effort to resolve this case by July 6. If they can't resolve it by that date they will contact us by phone and update us on the status of the case. So, as far as timing, when should we contact them, and how should the conversation go - what exactly should we say?

I can't tell you exactly, word for word, what to say. It is going to depend on what the bank says as to their position on settlement. You first need to know what the total payoff would be and then you would have to ask the bank if they are willing to work with you on some type of settlement and see what they offer. At that point you can try to negotiate the price or the terms but the bank is in control so it may be a "take it or leave it" proposal. I have no way of knowing what position the bank will take so I can't tell you what to do. Obviously you know what you can afford so everything is going to depend on whether you can afford to do what the bank requires. Since you already have a letter from them saying they want to work with you then you can simply call them and say you are responding to their letter and then let them take the lead as to what they are willing to do.
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