Common Myths – 5
Common Myths September 4th, 2009
5- At the end, the Bank sells the house. False. The bank never owns the home; the borrowers does. The borrower is always in control of the home and retains title, not the lender. It is common for the borrower or the heirs to sell the home at “the end” to repay the loan but the decision is made by the borrower or heirs. The heirs might choose to refinance the home in order to repay the loan instead of selling. HUD requires that this be an “arm’s length transaction”, however, and recent interpretations by HUD indicate heirs would need to pay the entire balance due… not just the fair market value.
Author – Robert H. Irving, CSA
Senior Reverse Mortgage Consultant
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