The Daily Item, Sunbury, PA

May 13, 2013

Real estate Q&A: Reverse mortgage not a short-term answer

By Gary M. Singer
Sun Sentinel (MCT)

— QUESTION: We took out a reverse mortgage a few years ago and now want to leave the house to move closer to our children. The loan is more than the property is worth, so we can’t sell it. What happens if we just walk away from it?


ANSWER: In a typical reverse mortgage, homeowners 62 years or older can receive money from a lender to pay off their current loan and supplement their retirement income. As long as the borrowers are living in the house, they don’t have to repay the loan. But once the borrowers no longer live there, the loan must be paid in full.

Most reverse mortgages are “non-recourse“ loans, meaning that the lender can take back only the house as repayment and can’t seek the deficiency from the borrowers or their probate estates.

In your case, you should review the paperwork and confirm that you have a “non-recourse“ mortgage. If so, you could walk away from the home knowing that the bank can’t come after you for the difference. You do want to make sure that any association dues are paid in the interim. Also, you are responsible for the home during the foreclosure process, so it makes sense to try to communicate with your lender to see if it will allow you to complete a short sale or another foreclosure alternative.

Reverse mortgages can be ideal in the right situations, but they do have drawbacks, including high upfront costs. They can be great long-term solutions but shouldn’t be used as short-term Band-Aids.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at or follow him on Twitter GarySingerLaw.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.