RM on a property, owner passed

[Scott Rosslow]

Sorry if this is not in the correct forum. My fiance (getting hitched in a month) has her own townhouse in a small HOA of 4 units. One owner passed and her son turned it over to the reverse mortgage company per an email he sent to the HOA. The 1300sf house on the property had a reverse mortgage from 2007 for $550k. I have no idea the remaining balance on the loan. I have called the number for the reverse mortgage and they couldn't find the property in their system. I would like to buy that property if the numbers are right. My understanding is the son could have bought the house at the remaining balance of the loan or 95% of the appraised value if its underwater. I feel like the house is worth maybe $180k maybe $250k if fixed up. I wanted to contact the son to see if we could structure a deal (if the numbers work) to buy the house, but I am not sure if that ship has sailed. Some questions I have:

• Would the reverse mortgage deal with me directly? It looks like they would be required to advertise the property for sale.
• Does the property go to foreclosure sale?
• I believe there are title issues with the property. The property appraiser files are a mess for the property. I plan on getting an attorneys opinion when I can locate the property/ assess the purchase price vs. value. Do title issues affect how they can sell the property?

[Wayne Brooks]

The son is the only one who can sell the property, unless it has already been foreclosed on. Sounds like this would be a short sale, so no real incentive for the son to go through the hassle. If the son does nothing, yes it will go to a foreclosure sale and most likely become a REO with the same 95% restriction. The son is the o lay one the lender will talk to/deal with.

Usually a short sale on these, at 95% of current value don’t work out to be a deal, as the appraisal usually doesn’t consider enough of the costs to bring to full value.

We don’t know what kind of “title issues” you are referring to....that would determine any additional obstacles.