Mortgage and Death And Reverse Mortgage

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My stepdad passed away in December 2013. He left the house to my mother, his partner of 37.5 years. The mortgage is not in her name, it was in his name only, and the day after he passed away, he was approved for a loan modification from Ocwen Loan Servicing. He, of course, was unable to sign. The loan company worked with my mother for 3 months and she was able to make an affordable mortgage payment.

They then upped it to $1050 per month, which she could not afford. She then applied for a reverse mortgage, as the payments were not within her financial means, however, she was only approved for $50,000 and the mortgage note was $69,000.

The reverse mortgage company told my mother not to pay the mortgage because they were going to try to work with Ocwen so that she could pay off the mortgage, but Ocwen will not deal with her, and she now owes over $7,000 in back mortgage payments.

What can she do? Please advise.

The house and deed are in her name, but the mortgage is under the Estate of my stepfather.


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You don’t mention what the house is worth, but the best option may be selling it. The good news is that title is now in her name, so at least that aspect is taken care of. She would be receive any sale proceeds after Ocwen’s lien is paid. Ocwen has little incentive to forgive the debt, and there is no way to compel them to do a short sale. It does seem very odd that they reduced the payment for only 3 months, most modifications last far longer than that. I’m guessing it was more of a courtesy, given her circumstances, than a legally binding modification. You might check with Beyond Housing (or your local housing non profit) to see if they can assist you, but selling the house (if value is sufficient) seems the path of least resistance. Since the mortgage is NOT in her name, the late payments (or even a foreclosure if all else fails) should not impact her credit, assuming Ocwen did not add her name to the loan during this process.

Answered 24 days ago
Ted Rood
1257 6
23 days ago Roxanne Montuoro said:
 

Thank you so much, Mr. Rood, for your quick and helpful response.

My stepfather had gotten the modification, he had been going through the trial since August 2013, after trying for 3 years. The relationship manager at the time had told my mother to continue paying the modified amount of the mortgage.

The house is appraised at approximately $92,000 and there is about $60,000 still owed on it. It was a 30 year fixed at 6.25%, from January 2003.

My mother’s name is not on the loan, the bill still comes to the estate. For quite some time, Ocwen would not speak with my mother. They demanded to speak to my stepfather, and when they were told he was deceased, they asked numerous times for the death certificate, which we faxed, emailed, and sent. Even afterwards, they still wanted to speak with him.

We are behind about $7,000 in payments (my mother was advised by a reverse mortgage company not to pay the mortgage until things get done.) We are unsure of what to do. She wants to sell the house and move back up North, where we have family.

Any advice is appreciated.

22 days ago Ted Rood said:
 

@Roxanne Montuoro If she’s on title, and there’s some equity there, should be able to sell and make the move. If you haven’t been paying the mortgage, Ocwen may initiate foreclosure proceedings, so if she wants to sell, I’d do so sooner rather than later. Anyone who advises folks to not pay their mortgage is setting up their clients for issues, foreclosure being the ultimate one.

19 days ago Roxanne Montuoro said:
 

@Ted Rood Thank you so much for your response again. My mother just spoke to a Realtor today, who told her that Ocwen’s attorney fees will be added to the costs. Is this legal? If they do charge, is she obligated to pay them? What would be the reason behind these fees? She is going to pay off the mortgage. The Realtor told her that the fees are astronomical.

19 days ago Ted Rood said:
 

@Roxanne Montuoro Yes, when loans go into default, late fees, unpaid interest, and attorney fees are added to the balances, and can add substantial amounts to the payoff. Such fees are not only legal, but typical. Once again, the party who advised you to stop paying on the mortgage did you no favors with their foolhardy and unproductive advice.


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Thank you so much, Mr. Rood, for your quick and helpful response.

My stepfather had gotten the modification, he had been going through the trial since August 2013, after trying for 3 years. The relationship manager at the time had told my mother to continue paying the modified amount of the mortgage.

The house is appraised at approximately $92,000 and there is about $60,000 still owed on it. It was a 30 year fixed at 6.25%, from January 2003.

My mother’s name is not on the loan, the bill still comes to the estate. For quite some time, Ocwen would not speak with my mother. They demanded to speak to my stepfather, and when they were told he was deceased, they asked numerous times for the death certificate, which we faxed, emailed, and sent. Even afterwards, they still wanted to speak with him.

We are behind about $7,000 in payments (my mother was advised by a reverse mortgage company not to pay the mortgage until things get done.) We are unsure of what to do. She wants to sell the house and move back up North, where we have family.

Any advice is appreciated.

Answered 23 days ago

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