The latest in a series of consumer-facing media attention for reverse mortgages, Fox Business News addresses several concerns regarding what happens to the property in the event of a borrower’s death.
An anxious reverse mortgage heir wrote a letter to Fox’s “Ask the Experts,” expressing his concern for what might happen to his borrowing father’s home when he eventually passes away.
Specifically, the heir inquired about whether or not the lender takes control of the house following the borrower’s death and if the mortgage company requires the balance of the loan be repaid.
“Any remaining equity remains with the homeowners,” the reply from Fox News writes. “If your father stays in the home until he dies, whoever inherits the home would have to pay off the loan balance.”
The article then goes on to suggest how the heir can repay the loan balance, offering methods such as selling the home or taking out a conventional mortgage on the property.
Additionally, Fox News also discloses that reverse mortgage lenders are required under federal law to provide up to a 30-day window for heirs to determine what they’ll do with the property. Should an heir choose to retain the home, they will then be allotted up to six months to arrange a sale or financing.
Fox News is the most recent mainstream publication to dip into the Q&A realm of reverse mortgages, with others like the Chicago Tribune and the Tampa Bay Times addressing readers’ various questions, comments and concerns in the past week.
Read more at Fox Business News.
Written by Jason Oliva