Wells Fargo Reverse Mortgage...anyone have any experience?

[Andrew Malik]

Hello!

I am working with a family who wants to sell their home and it has a reverse mortgage with Wells Fargo. I will be purchasing the home with cash and it needs A LOT of work.

Basically, the house is worth $300k ARV, the mortgage on the property is around $200k and the house in its' current condition is worth maybe around $100k. I have permission from the sellers to talk to the bank and I am waiting for the authorization to appear in Wells Fargo's system.

Does anyone have any experience with purchasing properties with reverse mortgages? It seems like most of the balance of the mortgage is just interest that is added on to the principal. Would it work just like a short sale?

Any tips would be much appreciated! Thanks!

[Account Closed]

Check the recorded mortgage docs. If the loan was recorded concurrently with a separate mortgage or deed of trust title HUD Home Equity Conversion Mortgage, that means the loan is guaranteed by the feds. If so, the lender will only allow a short sale at 95% of current value. They will have their own appraisal/BPO done and they will sell for 95% of that price and will not pay any other costs (typically).

If you've got an uninsured RM, you may be able to negotiate a better deal with the lender.

Is the borrower on the loan still living? If not, is the property in a trust?