Detailed Answer
Short summary: When a homeowner with a reverse mortgage dies, the reverse mortgage becomes due and payable. To sell the house and use proceeds to repay the loan you must provide the lender with clear proof of who has legal authority to sell the property. Lenders often ask for signed renunciation letters from other potential heirs when they are not satisfied that a single person has authority to convey title. Under Utah practice the most reliable ways to satisfy the lender are (1) present court-issued letters (letters testamentary or letters of administration) showing the personal representative’s authority; (2) show a valid trust document if the property was held in a trust; or (3) obtain signed deeds or quitclaims from all persons with an ownership interest. If you cannot get those quickly, a probate administration or a short sale negotiated with the lender are common alternatives.
Why the lender is asking for renunciation letters
Reverse mortgage lenders (most HECMs are insured by HUD) protect themselves by making sure the person selling or transferring the property has authority to do so. If multiple heirs might claim an interest, the lender may ask all possible heirs to sign a written renunciation or release saying they will not claim title or interfere with the sale. That protects the lender from later claims after payoff.
How to satisfy the lender and sell the house in Utah — step by step
- Obtain the death certificate. The lender will need an official death certificate of the reverse mortgage borrower(s).
- Contact the lender and request a payoff statement. Ask for a written payoff figure and the lender’s list of required documents to process a sale. For HECM information see HUD’s HECM pages: https://www.hud.gov/program_offices/housing/sfh/hecm.
- Establish who has legal authority to sell. Common proofs lenders accept in Utah include:
- Letters testamentary or letters of administration issued by the Utah probate court naming an appointed personal representative (executor/administrator). You can start probate so the court issues these letters.
- A full copy of a revocable living trust and evidence the decedent was trustmaker and successor trustee is entitled to act, if the property was titled in the trust.
- A deed or quitclaim deed signed by all heirs of record conveying the property to the seller or to a buyer. Lenders sometimes want notarized, witnessed releases from each heir.
- In limited situations, an affidavit of heirship or small estate affidavit; but lenders are often reluctant to accept these without additional protections.
- If multiple heirs exist and won’t sign renunciations: open probate in Utah so the court can appoint a representative and clear title. Probate provides a safe, widely accepted route for the lender to accept a sale. Utah court probate information: https://www.utcourts.gov/howto/probate/ and Utah’s estate code is at the Utah Legislature site: https://le.utah.gov/xcode/Title75/75.html.
- Consider negotiating a short sale or deed-in-lieu. If the house value is less than the payoff, the lender may approve a short sale or a deed-in-lieu of foreclosure, which still requires documentation of who can convey the property.
- Close the sale and pay off the reverse mortgage out of proceeds. At closing the lender will receive payoff funds and record a satisfaction of mortgage. Confirm the lender will provide a payoff and release upon receipt of sale proceeds.
Common documents the lender may request
- Original or certified death certificate
- Payoff demand and payee instructions from the lender
- Letters testamentary or letters of administration from Utah probate court
- Signed deeds or quitclaim deeds from all heirs or co-owners
- Trust document and trustee certification (if property in trust)
- A complete title report or owner’s title search
Practical tips and cautions
– If heirs are scattered or unwilling to cooperate, opening probate is often the fastest way to get title cleared for the sale. Probate gives the court-ordered representative clear authority that lenders recognize.
– Lenders sometimes accept a legally sufficient affidavit of heirship or notarized renunciation, but acceptance is discretionary. Don’t assume an informal document will be enough.
– If a surviving spouse occupied the home but did not sign the original mortgage, HUD rules give certain protections to non-borrowing spouses — discuss occupancy rights with the lender and a lawyer.
– Always get any lender concessions or approvals in writing. Do not rely on verbal promises.
When to consult a Utah probate or real estate attorney
Talk to a probate/real estate attorney if:
- Heirs disagree about selling the house;
- Multiple title issues exist (divided ownership, missing owners, or unclear deeds);
- The lender insists on unusual documentation you cannot produce; or
- The property value is less than the loan balance and you need to negotiate a short sale or deed-in-lieu.
Utah probate procedures and forms are explained at the Utah Courts site: https://www.utcourts.gov/howto/probate/, and Utah’s estate law text is located at: https://le.utah.gov/xcode/Title75/75.html.
Bottom line: A lender’s request for renunciation letters is a common effort to avoid future title disputes. The most reliable paths to sell are court-issued proof of representative authority (probate), a trust-based transfer, or signed deeds from all owners/heirs. If getting renunciations is impractical, open probate or retain a Utah attorney to negotiate acceptable alternatives with the lender.
Disclaimer: This information is educational only and is not legal advice. For help tailored to your situation, consult a Utah-licensed probate or real estate attorney.
Helpful Hints
- Start by requesting the lender’s exact payoff and document checklist in writing.
- Obtain multiple certified copies of the death certificate early — lenders and county recorders require their own copies.
- Order a title report before listing the property to identify all recorded owners and liens.
- If the property is in a trust, give the lender a full copy of the trust and the trustee certification.
- If heirs are uncooperative, file a simple probate administration to get letters of administration.
- If the loan balance exceeds value, discuss a short sale or deed-in-lieu with the lender and get approval in writing.
- Keep written records of all communications with the lender and all signed renunciation or release forms.
- Use Utah Courts resources for forms and procedure: https://www.utcourts.gov/howto/probate/.
- Review HUD HECM guidance for borrower death and heirs at: https://www.hud.gov/program_offices/housing/sfh/hecm.