Reverse mortgage - bank got judgment on me as heir

[BethJane]

What is the name of your state (only U.S. law)? NY

My father died 4 years ago (my mother had died 7 years earlier). He had a reverse mortgage on his house in New York. After he died, my sister and I had an appraisal done on the house and found out that its value was less than the balance on the reverse mortgage. So the house was headed to foreclosure.

I was named as the executor of the estate. I did everything by the book, had an attorney involved too. My father didn't have many assets, just about $3K cash in the bank that paid for the last of the hospital bills and utilities due. His VA benefit paid for his funeral. So everything was paid for, the estate was "closed."

Then about 2 years later I got a complaint in the mail (I had been having his mail forwarded to my address in NJ). I was being sued by the bank for the reverse mortgage loan amount. I knew from reading about reverse mortgages that I wasn't liable as an heir to the estate. I also thought generally that heirs aren't liable for any debts of decedents.

Well, based on this I just ignored the complaint, didn't answer it anything. I think now that was a huge mistake because the bank got a judgment against me and it's on my credit report now.

Is there any way now to vacate the judgment? The judgment was last August.

Thanks.

 

[not2cleverRed]

http://www.nycourts.gov/courts/nyc/civil/vacatingjudg.shtml

It is never a good idea to not respond. It is very likely that had you responded it would have been quickly dropped.
It is not good that you have taken this long to react to the judgement.

 

[Zigner]

What is the name of your state (only U.S. law)? NY

My father died 4 years ago (my mother had died 7 years earlier). He had a reverse mortgage on his house in New York. After he died, my sister and I had an appraisal done on the house and found out that its value was less than the balance on the reverse mortgage. So the house was headed to foreclosure.

I was named as the executor of the estate. I did everything by the book, had an attorney involved too. My father didn't have many assets, just about $3K cash in the bank that paid for the last of the hospital bills and utilities due. His VA benefit paid for his funeral. So everything was paid for, the estate was "closed."

Then about 2 years later I got a complaint in the mail (I had been having his mail forwarded to my address in NJ). I was being sued by the bank for the reverse mortgage loan amount. I knew from reading about reverse mortgages that I wasn't liable as an heir to the estate. I also thought generally that heirs aren't liable for any debts of decedents.

Well, based on this I just ignored the complaint, didn't answer it anything. I think now that was a huge mistake because the bank got a judgment against me and it's on my credit report now.

Is there any way now to vacate the judgment? The judgment was last August.

Thanks.

You NEED an attorney, not an internet forum.

 

[FlyingRon]

Any time a property is foreclosed those with a potential ownership interest need to be named so that they can be given the chance to defend the interest they are going to lose if the foreclosure occurs. Usually you can respond to the lender officially disclaiming any interest in the property and get off the lawsuit.

You should rest assured that all you have to lose here is your interest in the property. THey are not coming after you for money. The fact that you are listed may cause some transient angst (will take some explanation for example if it comes up while you are trying to get a mortgage otherwise).

 

[BethJane]

Any time a property is foreclosed those with a potential ownership interest need to be named so that they can be given the chance to defend the interest they are going to lose if the foreclosure occurs. Usually you can respond to the lender officially disclaiming any interest in the property and get off the lawsuit.

You should rest assured that all you have to lose here is your interest in the property. THey are not coming after you for money. The fact that you are listed may cause some transient angst (will take some explanation for example if it comes up while you are trying to get a mortgage otherwise).

Thanks. I don't think I can "get off the lawsuit" since they got a judgment against me. But thank you for the reassurance that it does not seem as bad I as I thought it would be. You are right that no one seems to be coming after me for money. It's just the judgment on my credit report that is damaging. I would like to get that erased somehow because, as you said, things will come up in the future where that will be negatively impacting me.

 

[Cedrus]

I'm a little confused, as usual. Was this a government insured RM. If so, I thought the bank gets what the house sold for...and the insurance kicks in the rest to satisfy the bank.

 

[BethJane]

I'm a little confused, as usual. Was this a government insured RM. If so, I thought the bank gets what the house sold for...and the insurance kicks in the rest to satisfy the bank.

I think probably all reverse mortgages are government insured. The bank couldn't get its money back after the house was sold because the loan was more than the house was worth. So the house never got put on the market in the first place.

 

[davew128]

On the bright side, any of the capitalized interest on the loan that gets paid is a tax deduction to the estate and would pass out to the heirs in the year the estate closes.

 

[OHRoadwarrior]

When the estate was closed, as they were apparently a creditor, they should have received any deficiency due contractually. If you or anyone else received anything from estate, they will likely owe it back as you ignored the debt.

 

[davew128]

When the estate was closed, as they were apparently a creditor, they should have received any deficiency due contractually. If you or anyone else received anything from estate, they will likely owe it back as you ignored the debt.

My father didn't have many assets, just about $3K cash in the bank that paid for the last of the hospital bills and utilities due. His VA benefit paid for his funeral. So everything was paid for, the estate was "closed."

Don't think that will be an issue...

 

[OHRoadwarrior]

Many assets and any assets are two different things.

 

[FlyingRon]

Who's insurning it has nothing to do with the fact that the bank just can't sell or otherwise dispose of the property without going throught he legal process.

 

[mrsjohnson]

How did this company get a judgement without proper service? Don't you have to be served? Is that what the OP is saying she ignored?

If I were her, I would look into potential FCRA and FDCPA violations and check the service to see if she can have the judgement vacated.

 

[Zigner]

How did this company get a judgement without proper service? Don't you have to be served? Is that what the OP is saying she ignored?

If I were her, I would look into potential FCRA and FDCPA violations and check the service to see if she can have the judgement vacated.

This thread is 2-1/2 months old - also, I'm not sure what FCRA and/or FDCPA may have occurred - just read the post.

 

[FlyingRon]

This thread is 2-1/2 months old - also, I'm not sure what FCRA and/or FDCPA may have occurred - just read the post.

What on earth do FCRA or FDCPA issues are involved in a foreclosure. Doubtful that anything appeared on anybody's credit report and foreclosures aren't covered by FDCPA.