You still can bring suit for the work you performed. It is just that your lien is worthless. You cannot continue to live in the house unlawfully until you have earned out the amount you are owed. They can evict you if you do not vacate.
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The heir owes you money. The house can be sold and I question that it is upside down because most reverse mortgages are set up at 40-60% of value at the time the loan closes. Without numbers, and values, I would say proceed with off set by rent. It will be 6 months prior to Bank or Trustee Sale, you have a defense to eviction and 6 months may be a better deal.....Ask a similar question