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Roger
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Category: Real Estate Law
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My fathers estate includes a house , which has a reverse

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My father's estate includes a house , which has a reverse mortgage. BofA sold the mortgage to Champion and I managed to get HUD extensions for one year (which was May 11).The property will be put on the market on June 1. I have asked Champion for one final extension for 90 days from May-Aug 11. Are there laws to protect us? We have a copy of the listing agreement with Coldwell Banker? They have sent 2 due diligence letters and we have received the first letter of default.Thanks for your help. Janet Beardsley
p.s sizeable equity in house of about $500,00 mortgage is $300,000.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Roger replied 1 year ago.
Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney.

As you know, the heirs of the deceased have the ability to seek an extension of up to 12 months (6 months plus two 3 month extensions) to determine what they would like to do with the property. The heirs could pay off the mortgage balance with cash or through a refinance. If the family doesn't want to keep the house, it can be sold and keep the equity that is left over after paying off the loan.

Thus, there is no legal right for an extension past the initial 12 month period. The lender can grant this if it chooses to do so, but there's no RIGHT to an extension.

However, if the lender refuses another extension and proceeds with selling the house, your father's estate would be entitled to the equity in the property after the loan balance is paid. In other words, the proceeds remaining after paying off the reverse mortgage would be turned over to your father's estate. Thus, if there is this much equity in the house, it will be paid out to the estate and NOT kept by the lender.
Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 26694
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
Roger and 4 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.
Thanks for your response. We have a great real estate company, Coldwell Banker, who we feel will list the property at a great price, better than Champion would. Any idea how many default notices will be served?
Expert:  Roger replied 1 year ago.
Technically, foreclosure can begin the foreclosure process as soon as the loan goes into default - - which in this case is when the 12 month period expires.

Thus, the notice you received would likely be the only notice you get before the foreclosure proceeds.

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