Detailed Answer
Short answer: When a borrower with a reverse mortgage dies, the lender generally declares the loan due and asks the person(s) who inherited the home to either repay the loan, sell the property and use proceeds to pay it, or transfer title to the lender. If a lender repeatedly requests “renunciation” letters from you, do not sign anything without understanding exactly what you would be giving up. In Minnesota, the safest paths are to (1) provide the lender the legal documents that prove who has authority over the estate (letters testamentary, letters of administration, or trustee documents), or (2) open probate or estate administration so an appointed representative can deal with the servicer. You also can negotiate sale timelines, a short payoff, or a deed-in-lieu—but get legal advice first.
Why a lender asks for renunciation letters
Servicers often ask heirs to sign forms that say they “renounce” certain rights so the servicer can close the account or proceed with a sale. Common lender reasons include:
- They want a clear written statement that heirs will not claim the loan is being assumed or that heirs are not asserting special rights that could block sale.
- They want to confirm no one is planning to contest the loan or assert a different legal status (for example, a claim that the decedent was not the borrower).
- They want a document that the title company will accept to clear title at closing.
Why you should be cautious
Signing a renunciation can have serious consequences. You may be giving up inheritance rights, claims under a will or trust, or the right to ask the court to appoint you as personal representative. A blanket renunciation may remove your ability to participate in probate or to challenge actions by the servicer. Minnesota law gives heirs statutory procedures and protections in probate and for real estate transfers; you should not abandon those rights without counsel. See Minnesota probate law: Minn. Stat. ch. 524 (Probate Code).
Practical steps to take now (Minnesota-focused)
- Get basic paperwork to the lender immediately: Certified death certificate for the decedent, a copy of the mortgage note (if available), and a current title search showing heirs/owners. This allows the servicer to identify who they should communicate with.
- Ask the servicer in writing what legal authority they need and why: Request a written explanation of the specific legal basis for requesting renunciation and a sample form. Ask whether proof of authority to act for the estate (letters testamentary/administration, trustee certificate) will satisfy them instead.
- Do not sign any renunciation without legal review: A renunciation can cut off inheritance claims. Even if the lender frames the form as routine, have an attorney review it before you sign.
- Provide proof of authority when possible: If there is a will and someone was named executor, provide certified letters testamentary. If there is no will, consider opening probate and getting letters of administration that give the personal representative authority to sell the home and pay creditors, including the reverse mortgage. Minnesota probate procedures are in Minn. Stat. ch. 524.
- Consider a short-form probate or summary procedures: If the estate is small or a simple conveyance suffices, Minnesota has streamlined procedures that may let you clear title or sell faster than formal administration. Ask a Minnesota probate attorney whether a small-estate affidavit or summary procedure applies.
- Negotiate a sale timeline and payoff figure: HECM servicers typically provide a payoff demand and will allow a window for sale. If you need extra time to list and close, ask for an extension in writing and negotiate options (e.g., short sale or deed-in-lieu). Keep all requests and responses in writing.
- Explore alternatives to renunciation: Provide the lender with a recorded affidavit of heirship only if it accurately states the facts and you understand its effect. In many cases a certified order appointing a personal representative or a trustee certification works without renouncing rights.
How Minnesota statutes and procedure come into play
Under Minnesota law, estate administration gives an appointed personal representative the authority to sell estate real property, resolve creditor claims, and distribute proceeds. A servicer that wants assurance it is dealing with the proper party will accept court-issued letters or trustee documentation. For mortgage and foreclosure procedures generally, see Minnesota statutes on mortgages and foreclosure practice: Minn. Stat. ch. 580 (Mortgages & Foreclosure). These statutes do not authorize a lender to force heirs to give up inheritance rights without proper legal notice and process.
If the lender still insists
- Request a written explanation of the legal authority for the requested renunciation and ask whether alternative documents (letters testamentary, trustee certification, probate court order) will satisfy them.
- If the servicer continues to demand renunciation as a condition to sell or clear title, get an attorney to send a response pointing out Minnesota probate process and the risk of wrongful waiver of heirs’ rights.
- If the lender pursues foreclosure or refuses to negotiate, you may need to defend the estate’s rights in Minnesota probate court or district court. An attorney can help you file the right pleadings or seek injunctive relief to preserve the estate while you sell the house.
Sale mechanics you should expect
Once authority is established (by serving as personal representative, providing trustee documents, or otherwise), a sale typically follows normal Minnesota real estate procedures: list the property, accept an offer, open escrow, obtain a payoff demand from the servicer, and close with the servicer paid from sale proceeds. If the reverse mortgage is FHA-insured (a HECM), the servicer will provide payoff figures and required steps for closing. HUD has guidance for heirs and servicers: HUD HECM (reverse mortgage) program.
When to involve an attorney
Contact a Minnesota attorney if:
- The lender demands renunciations or other waivers of inheritance rights;
- You are unsure who has legal authority to sell the home;
- The servicer refuses reasonable time to sell; or
- Title issues or conflicting heir claims arise.
Disclaimer: This article explains general principles under Minnesota law and does not provide legal advice. It does not create an attorney-client relationship. For advice about your specific situation, consult a Minnesota attorney.
Helpful Hints
- Do not sign any renunciation or waiver before talking with a lawyer—some forms permanently give up inheritance rights.
- Gather and send the death certificate and any document that shows who should control the property (will, trust, deed, trustee certificate).
- Ask the lender for a written description of exactly what they need and why; request a sample form and the statute or policy they rely on.
- If you are named executor or trustee, get certified copies of letters testamentary or trustee certification—lenders accept these routinely.
- If there is no will, consider opening probate and getting letters of administration so you can lawfully sell the house and pay creditors.
- Keep all communications with the lender in writing and keep copies of payoff demands, notices, and any forms they send.
- If time is tight, ask for an extension in writing while you arrange probate or sale; many servicers will grant reasonable windows to sell.
- Consider an experienced Minnesota probate or real estate attorney early—small errors can cost the estate and heirs time and money.