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What should I do about a trustee that has violated the loan terms on a reverse mortgage?

Los Angeles, CA |

One of the trustees of my families estate took out a reverse mortgage on my mothers house about two years ago. He did not get authorization from the court and he did not report this in any accounting. He then moved my mother to Atlanta, GA where she has been for the past two years. They are trying to get a conservatorship of her in GA. If I report this to the mortgage company, will they take my mother's house on a default or go after the trustees?

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Attorney answers 4

Posted

You need to consult with local counsel. You may need GA counsel as well. You may have a claim against the trustee. I'm not sure from your question what the mortgage situation in GA is. You should get a local attorney to ask formally for an Accounting from the trustee and investigate from there.

Asker

Posted

The Los Angeles Probate court removed the trustees back in October 2012. We have had a open Probate case in Los Angeles, CA since 2004! Both have been sanctioned for not filing a proper accounting but they still have not produced an accounting of the Living Trust that contained my mother's house that is in Inglewood, California. The trustees moved my mother to Atlanta, GA after they took out the reverse mortgage to keep her ignorant of how much they were stealing from her estate! Is this mortgage fraud?

Posted

Your answer depends on the terms of the reverse mortgage. Many of them DO provide that if the mortgagor is not living in the residence for 6-12 months, then the mortgage needs to be paid off.

James Frederick

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

Asker

Posted

It is required for the mortgagor to be living in the home for this mortgage. They have kept her in GA for two years now. Is this mortgage fraud? If so will they hold the trustees liable?

James P. Frederick

James P. Frederick

Posted

Someone needs to review the mortgage. It may state that they need to be made aware of any changes in residence. The problem is, the mortgage debtor may have lost the ability to do so. Fraud usually requires an element of intent. You cannot show that in a case where the person lacks capacity. There could be a civil action for breach of contract, but more than likely, their response would be to foreclose on the loan.

Posted

You need to consult with a local attorney in California to review all of your facts and documents surrounding your mother's situation. Only after a detailed review will you be able to determine how to properly move forward.

** LEGAL DISCLAIMER ** My response above is not legal advice and it does not establish an attoreny-client relationship. When responding to questions posted on Avvo, I provide a general purpose response based on California law as I am licensed in California. In reviewing my response, you are specifically advised that your use of, or reliance upon any response I provide is not advisable. I do not have all relevant background details or facts related to your issue / matter, thus I am not in a position to give you legal advice. Further, your review, use of, or reliance upon my response does not establish an attorney-client relationship between us nor does it qualify as a legal consultation for any purpose. For specific advice regarding your particular circumstances, you should consult and retain local counsel. Law Offices of Eric J. Gold www.EGoldLaw.com Telephone: 818-279-2737 Email: service@egoldlaw.con

Posted

If it is a federally approved reverse mortgage (99% are) then the loan will become do and payable no later than one year after a person moves out of the home. If the mortgage company is notified they will likely bring an action to foreclose on the loan. They would take the loan amount, plus interest, plus legal fees; anything left over would go to your mom. If there is a lot of equity in the home the lender may not care as they know they will eventually get their money and the interest will keep compounding.

Every situation is different, it is important to discuss your legal issue with a knowledgeable attorney in your jurisdiction. To schedule an appointment with me please contact me at 800 220-4205 or www.MartyBurbankLaw.com

Asker

Posted

The loan was for the total value of the condo. What about mortgage fraud by the trustees? Would the mortgage company seek criminal charges against the conservator/trustee? My mother's home is in her trust and it was under the jurisdiction of the LA Probate court. The trustees/conservators did not get authorization from the court before they took out the loan, nor did they report the mortgage in their accounting to the court! When they were appointed as conservators, they reported that my mother is not mentally competent to handle her own business affairs but yet they got her to sign for the mortgage. She does not even know now that she has a mortgage on her house. Both trustees were removed by the LA Probate court in October 2012 for not filing an accounting!

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