A Probate usually occurs when there is a Reverse Mortgage:

A Probate is usually needed when there is a Reverse Mortgage. This occurs when assets, such as a house or a condominium, are worth over $184,500 and the homeowner does not have a Trust.

Why a homeowner would want a Reverse Mortgage:

A homeowner may contract with a Reverse Mortgage company if he/she is over 62 years and has at least 50% equity in the property. This would allow the homeowner to have more retirement income. The Reverse Mortgage company would pay the off the existing mortgage. In essence, the owner would not need to pay the mortgage and may also receive tax free funds. The reverse mortgage loan becomes due when the borrower passes away, moves out or sells the home.

When a Death Occurs:

It is best that family members notify the Reverse Mortgage company immediately when the decedent passes away. The Reverse Mortgage company requires full payment of the loan within 90 days. However, the filing of a Probate usually extends the 90 day timeframe. At this point it is best to speak with a Probate Attorney to determine how to proceed.

Hiring a Probate Attorney when there is a Reverse Mortgage:

The role of a Probate Attorney is the same as in any Probate with a few considerations. First, the attorney confirms that there is enough equity in the property to warrant a Probate. Second, the attorney verifies the need for a sale in order to pay the loan off in full. In rare instances, a family member(s) may wish to keep the home and pay off the loan. Approval is based on the ability to pay off the loan.

The next step is to appoint an administrator, or personal representative, who has the authority to talk to the Reverse Mortgage company. The administrator will sign a letter of authorization which allows the Probate Attorney to speak with the Reverse Mortgage company.

Once authorized, the attorney will then file the Probate and issue letters testamentary. In addition, he/she will publicize the sale in a legal newspaper. A realtor would then arrange for the sale of the property. The attorney files a petition to confirm the sale of an appropriate buyer. The court then sets a confirmation hearing. At that hearing, the court approves the sale. The original buyer or an over-bidder buys the property. However, when there is a Will, the sale may proceed without a court confirmation hearing or a publication.

Escrow pays off the Reverse Mortgage in full. The attorney deposits the net proceeds in an estate account. Once finalized, the attorney distributes the net proceeds, minus attorney fees and cost of administration, to the heirs or beneficiaries.

When you have a possible Probate, call Legal Action Workshop! Our experienced Probate Attorneys know the steps needed in order to finalize and distribute assets to heirs or beneficiaries. Call 1-800-HELP-444 for fast answers to your questions!

Reader Interactions


  1. Michael Hodges says

    My Mother passed and had a reverse mortgage on her condo. There is no equity on the property. She was sole owner. Do siblings need to file in probate. Back is taking back property with no responsibility to family.

    • Brenda Platt-Drucker says

      If there is no equity in the property then there would be no need to do a Probate as the purpose of a Probate is to divide assets among heirs.
      Hope this helps!

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