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Am I liable for my dead parent's underwater reverse mortgage if no estate was ever probated?

Branford, CT |
Filed under: Formal probate

My parents passed away in 2009. All their assets passed to me by beneficiary designations or through being a joint tenant on a bank account, except for their Florida house which had a reverse mortgage that was under water - selling the house could not pay off the loan. I did not and do not want the house and no estate was ever probated since there was nothing of value to enter an estate. Yesterday I received a court summons saying I was being sued by the mortgage company for foreclosure. Do I have to do anything? Am I liable for any monies owed the mortgage company? Is this just a formality I can ignore and (willingly) lose the house?

Attorney Answers 3


Provided the complaint is ONLY for foreclosure on the security (the house) and they are not seeking a judgment against you, you can 'ignore' this, however, I would not recommend EVER actually ignoring a summons. You should at the very least file an answer concurring in the relief requested in so far as it requests the house be transferred to the mortgage company, but be sure they don't also try to get you into personal liability.

I raise this particularly because they appear to have named you rather than your parent's estates as the defendant, and if your name was not on the paperwork, I am concerned about the fact you're named here.

I would recommend hiring a Florida attorney to review the paperwork to insure this won't come back to haunt you -- provided the involvement is limited such representation should be fairly inexpensive and it is an 'insurance policy' I wouldn't do without in your position.

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I agree with the above attorney that you should retain a florida lawyer, as the case will be decided under florida law. If they are merely seeking to sell the house in fulfillment of the mortgage, you should be fine. However, if you took any property belonging to your parents on their death, the fact that you did not do so through formal probate probably does not prevent them for seeking it's return in fulfillment of the outstanding mortgage debt. As a practical matter, at least up north, most banks would rather just leave it alone, but a Florida attorney would be able to speak to the foreclosure claim and whether that is the case down there.

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You could try contacting the lender directly to find out what they are looking to recover. If all they are looking for is to foreclose on the mortgage and take possession of the home, you might be able to work this out with them directly and avoid court. Most reverse mortgages are FHA insured. This means that even if the property is underwater the only thing the lender can do is take the property. FHA then pays the lender for any shortfall. If you don't feel comfortable dealing directly with the lender you should consult an attorney licensed to practice in Florida to represent you in court.

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