Listing a Home Encumbered by a Reverse Mortgage

If you are a real estate agent or heir who is selling a home with a reverse mortgage loan, it is very important for you to know what is owed on the balance of the loan. Each month the loan servicer sends out a mortgage statement to the borrower in the mail that shows the current loan balance. This will help you get an idea of how much will be needed to pay off the reverse mortgage. If you do not have the current mortgage statement that is mailed out to the borrower monthly, you may need to contact the loan servicer to get this payoff amount. In this video, Jeff Foody, Owner of Northwest Reverse Mortgage, Oregon’s leading reverse mortgage brokerage, discusses how a reverse mortgage shows on a title report and how the amount owed can be deceiving to a listing agent.

Reverse mortgages are non-recourse loans so when selling a home with a reverse mortgage if the loan balance is more than the value of the home the servicing company will accept 95% of the appraised value of the home and the remaining 5% goes to the listing agent for their work on selling the home. The mortgage insurance on the HECM reverse mortgage will cover the difference between the home value and the loan payoff amount. This is a feature that is not available on many traditional loans and gives additional protection to the heirs and confirms the listing agent will get paid for their work when the home sells. To learn more about the non-recourse feature, check out our FAQ page here: Reverse Mortgage FAQs

If you have any reverse mortgage questions, we would love to assist. Please call or email us anytime. Info@nwreverse.com or 503-427-1667