Reverse Mortgage and Tax Lien

polenti · #1 (**permalink**) 08-17-2009, 07:09 PM

Hi,

Im 68 years old and living in NY. I am looking to get a revese mortgage. I have a life estate and my son is the remainderman. My son owes back taxes to the IRS and there is a lien filed, as we learned by looking at his credit report.
Does his lien affect my ability to get a reverse mortgage, i.e. do we have to pay the back taxes before I can get the reverse mortgage?

Thanks in advance,

George

GarySpicuzza · #2 (**permalink**) 08-20-2009, 01:52 PM

You can't get a reverse mortgage on that property George.

YOU DON'T OWN THE PROPERTY.

You only own the "right" to live there until you die.

If you transfered ownership to your son and reserved a "Life Estate" for yourself you no longer own the house.

Have an ATTORNEY file a "Corrective Deed" and retitled the house back into your name,......then go get your Reverse Mortgage.

Norton · #3 (**permalink**) 08-20-2009, 06:10 PM

According to this article you can get a reverse mortgage even though there is a life estate on the property:

"Commentary: Reverse mortgage benefits come with planning"

****Note: I was not allowed to post the link but just search Google for the above tile ****

"A reverse mortgage can be obtained without altering the property's title, even when it's held in the name of a living trust - - oe revocable trust or life estate"

"Life Estate

Senior borrowers holding title under a life estate also are eligible for a reverse mortgage. Under a life estate, title to the property has passed via deed to another person, generally an heir, with the grantor retaining the right to occupy the prperty for life."

I don't know the answer to the original IRS tax lien question.

GarySpicuzza · #4 (**permalink**) 08-21-2009, 01:50 PM

Norton thanks for the information!
That's good to know!

It was my understanding that you must "own" the property to obtain a reverse mortgage. I'd like to see information from an actual reverse mortgage lender though rather than just an Interent article.

Click HERE for the linky.

Quote:

Life estate

Senior borrowers holding title under a life estate also are eligible for a reverse mortgage. Under a life estate, title to the property has passed via deed to another person, generally an heir, with the grantor retaining the right to occupy the property for life.

So long as the life estate holder has the right to -- and actually does -- occupy the property for life, the lender will approve the reverse mortgage. Under the program the heir holding legal title must consent to the mortgage and receive reverse mortgage counseling.

The title also must remain unchanged for the duration of the reverse mortgage.