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Reverse Mortgage

Hi guys. Looking at a property that has an underwater reverse mortgage. From what I understand underwater HECM conforming reverse mortgages can be paid off by the seller at 95% of the properties current appraised value (with no deficiency issue to the seller).

A few specific questions:

  • How is the appraised value established? If I were to put a contract on the house for X amount would the appraisal done by my bank be the appraised value as per HECM rules?

  • Are sellers fees (agent commissions, sellers credits to the buyer, etc) deducted as normal from this 95% value with no effect to the seller?

  • In this scenario the seller would not be walking away with any money from the closing. Their other option through HECM is simply to surrender their property deed in lieu. I’m trying to avoid that.

In terms of getting them some funds legally outside of closing. I’ve read that purchasing all of their furnishings, furniture, etc is one option. Any other ideas? Is there no way to pay relocation expenses or something along those lines?

Thanks!

submitted by /u/Tanto373
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source https://www.reddit.com/r/RealEstate/comments/pdxubs/reverse_mortgage/
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