Detailed Answer — what you need to know and do

1. Figure out the current legal situation

Start by determining whether the borrower is still alive, incapacitated, or deceased. The process differs:

• If the borrower is alive but incapacitated: a power of attorney (POA) may allow a designated agent to act — but most POAs end at death. Confirm whether the POA is still valid for the transaction and whether the lender accepts it for reverse-mortgage actions.
• If the borrower has died: the reverse mortgage becomes due and payable under the lender’s loan documents. The estate or heirs must either repay the loan, sell the home and use proceeds to pay the loan, or take other loss-mitigation steps the servicer permits.

2. What is a “renunciation letter” and why the lender may ask for it

In this context, a renunciation letter is a signed, written statement by a person with an inheritance interest (an heir or beneficiary) saying they expressly waive or renounce any right to occupy, claim or otherwise block the sale or payoff of the home. Lenders sometimes request renunciations so they have written assurance that no heir will later assert occupancy rights or contest the sale.

3. Do heirs have to sign renunciations?

No. Heirs generally cannot be forced to sign a renunciation. However, if an heir refuses, there are practical and legal alternatives:

• Get a court order or letters testamentary/letters of administration that give the personal representative legal authority to sell the property. A probate court order overrides the need for voluntary renunciations.
• If all heirs consent, a signed renunciation or written family agreement can simplify closing and speed the lender’s acceptance of a sale payoff.
• If heirs contest, you may need a probate settlement, partition action, or court authorization to sell the property.

4. Use of probate tools in New Mexico

To show the lender you have authority to sell the home you can:

• Open probate and get letters testamentary (if there is a will) or letters of administration (if there is no will). Those letters are documentary proof the personal representative can act for the estate.
• Seek a court order authorizing sale of the real property. New Mexico courts can issue authority to sell estate property when needed to pay debts or distribute proceeds.
• Where applicable, use small-estate or summary procedures if the estate qualifies under New Mexico probate rules — discuss with counsel whether those procedures apply.

For New Mexico statutes and probate procedures, start at the New Mexico Legislature statutes and the New Mexico courts probate resources: New Mexico Statutes (NMSA) and New Mexico Courts. These pages point to the probate code and local court forms.

5. What the lender will require at closing

Typical lender requirements to accept a sale payoff include:

• A payoff statement from the reverse mortgage servicer showing the amount needed to satisfy the loan.
• Proof of authority from whoever is selling (letters testamentary/administration, or a court order permitting sale).
• A death certificate (if applicable) and documentation of title/ownership.
• Sometimes signed renunciations or releases from heirs if the servicer is trying to limit future claims.

6. If an heir refuses to sign a renunciation

Options include:

• Proceed to probate and obtain court authorization to sell. The court can bind heirs once it issues an order.
• Negotiate with the heir: a limited release in exchange for a share of the sale proceeds can resolve disputes faster than litigation.
• If the heir is occupying the property, the estate may need a court eviction or possessory action before sale.

7. Practical timeline and servicer communication

Reverse-mortgage servicers will provide a notice explaining the loan is due and payable and the options available. Timeframes and remedies vary by loan and servicer. Keep communication written and retain copies of all documents you send. If the servicer’s requests are unclear or inconsistent, ask for a written explanation of exactly what documentation they need to accept a payoff and proceed to closing.

8. Government resources and protections

For federal guidance about Home Equity Conversion Mortgages (HECM, the common federally insured reverse mortgage), review HUD’s HECM information: HUD HECM information. If you believe a servicer is not following rules or is acting unfairly, you can contact the Consumer Financial Protection Bureau (CFPB): Consumer Financial Protection Bureau.

9. When to get a New Mexico attorney

Consult a New Mexico real estate or probate attorney if any of the following apply:

• Heirs refuse to sign renunciations and are obstructing sale.
• You need to open probate and seek letters or a court sale order.
• The servicer is making inconsistent demands or you suspect improper conduct.
• There are occupant issues, competing claims of ownership, or complex title concerns.

An attorney can prepare affidavits, petition the probate court for authority, negotiate with the servicer, and ensure the sale closes cleanly.

10. Typical step-by-step checklist (example scenario: borrower deceased)

1. Obtain the death certificate and contact the reverse mortgage servicer to request a payoff statement and written list of required documentation.
2. Gather title documents, will (if any), and contact all known heirs/beneficiaries.
3. If you are the named executor, open probate and secure letters testamentary/administration if the lender requires proof of authority to sell.
4. If all heirs agree, obtain written renunciations or releases from heirs and submit them with the payoff instructions to the servicer.
5. List the home, accept an offer, provide the servicer with closing instructions and the payoff amount, and complete sale closing with lender payoff at closing.
6. If an heir refuses, file the necessary probate petition or court motion to authorize sale.

Remember: the lender’s acceptance to close will usually depend on receiving clean title and documentation showing the seller has legal authority to sell and repay the loan.

Relevant resources: New Mexico statutes and probate rules: https://www.nmlegis.gov/Legislation/Statutes; New Mexico Courts general site and probate resources: https://www.nmcourts.gov/; HUD HECM information: https://www.hud.gov/program_offices/housing/sfh/hecm/hecmhome.

Disclaimer: This is general information about New Mexico law and common lender practices. This is not legal advice. For advice about your specific situation, consult a licensed New Mexico attorney.

Helpful Hints — practical tips to move the sale forward

• Ask the servicer for a precise, written list of the exact documents they need to accept a payoff and close (payoff statement, death certificate, letters, renunciations, signed closing statements).
• If time is short, ask the servicer whether a court order will substitute for renunciations and what specific court language they require.
• Get all heirs’ contact information in writing. Often a simple written family agreement or limited release resolves lender concerns fast.
• Document every call and email with the lender — include names, dates, and what was said.
• If a POA was used before death, remember it generally ends at death. Don’t rely on it to sign closing documents after the borrower dies.
• When possible, work with a title company experienced with reverse-mortgage payoffs; they often know what documentation local servicers accept.
• If a dispute seems likely, consult a New Mexico probate or real estate attorney early — a short attorney intervention can save months of delay and costly litigation.
• Consider contacting HUD or CFPB for guidance if the servicer is a federal HECM servicer and you believe rules are not being followed: HUD and CFPB.