Detailed Answer
If your father had a federally insured reverse mortgage (a HECM) and has died, the loan generally becomes due and payable. The loan servicer (the reverse mortgage lender) will want to know who will repay the loan, refinance the property, or sell it to satisfy the loan balance. When the servicer requests “renunciation letters,” they are often asking heirs or potential personal representatives to formally state whether they accept appointment to administer the estate or whether they give up (renounce) the right to act so the servicer can deal with the person who will handle the sale or payoff.
Below is an explanation of why the servicer may request renunciations, what the usual legal paths are under Kansas practice, and practical steps you can take to sell the home.
Why the lender asks for renunciation letters
- The servicer needs clear legal authority to communicate with or accept instructions from a person who can sell the house or pay off the mortgage. If multiple heirs exist or if no executor/personal representative has been appointed, the servicer may be unsure who has that authority.
- A renunciation letter (sometimes called a renunciation of administration) is a signed statement from an heir that they will not seek appointment as personal representative or will not contest another person’s appointment. That helps the lender rely on the person who is acting (for example the person who will sell the home) without fearing later claims from a renouncing heir.
- Servicers ask for these documents to reduce legal risk and to ensure they follow HUD/CFPB rules for loan maturity and property disposition.
Legal paths to sell the house in Kansas
There are generally three common options after the borrower’s death:
- Heirs sell the home to repay the loan. The servicer will provide a payoff amount and instructions. A sale usually closes like any other sale, but the lender must be paid from sale proceeds.
- An heir or a buyer refinances the reverse mortgage into a new mortgage to keep the house.
- The estate handles the sale through probate (if probate is required). A court-appointed personal representative (executor or administrator) signs closing documents so the sale can proceed.
How renunciation letters fit into these paths
If no personal representative has been appointed, Kansas law allows heirs to agree about who will act. A lender may ask heirs who will not be acting to sign a renunciation of administration so the lender will rely on the single person who does act. Alternatively, an heir who does not want to act can sign a document renouncing their right to be appointed. That simplifies title and lets the servicer accept instructions from the appointed representative.
Practical, step-by-step checklist to sell the house
- Obtain several certified copies of the death certificate and provide one to the loan servicer. Servicers require an official death certificate to begin the process.
- Contact the reverse mortgage servicer immediately. Ask for (a) a written payoff statement showing the amount due and (b) a written list of the documents they require (for example: death certificate, proof of authority to act, signed renunciations, or a court appointment).
- Confirm whether the servicer will accept a sale signed by an heir or if the servicer requires appointment of a personal representative. If multiple heirs exist, request guidance on the servicer’s renunciation form or the wording they want. Do not sign anything you do not understand; get the exact form or required language in writing from the servicer.
- If the servicer requires renunciations: ask them to provide a template or the precise text they will accept. Typically, a renunciation must be signed, dated, and notarized. It should state that the signer declines to act as personal representative and will not contest another person’s authority to act.
- If the servicer will not accept renunciations or heirs cannot agree, file for appointment of a personal representative in the Kansas probate court in the county where the decedent lived. The court-appointed representative can sign sale documents for the estate. The Kansas courts website explains local probate procedures and forms (contact the local probate clerk for exact requirements).
- Work with a real estate agent familiar with reverse-mortgage sales. Provide the payoff statement at listing or during negotiation so buyers and agents understand lender payoff requirements.
- At closing, ensure the lender is paid from sale proceeds. The title/closing company will coordinate payoff and release of the lender’s lien.
- If sale proceeds will not fully satisfy the loan, discuss alternatives with the servicer: short sale authorization, deed-in-lieu, or HUD loss-mitigation options. FHA-insured HECMs sometimes permit short sales or deeds-in-lieu under certain conditions—ask the servicer for available options and timelines.
Timing and lender deadlines
Under federal HECM rules, the loan becomes due and payable upon death, but servicers often allow a marketing and sale period (commonly several months) for heirs to sell the property. Servicers can grant extensions if heirs show good cause and a marketing plan. Ask the servicer for their standard timeline in writing and any extension procedures.
Who should sign a renunciation?
Only heirs who actually want to decline appointment as personal representative should sign a renunciation. If you sign a renunciation, you give up the right to be appointed to administer the estate and may lose legal authority to act on estate matters. If you are unsure, do not sign without legal advice. If multiple heirs exist and all but one renounce, the remaining person can often be appointed and handle the sale.
When probate is not needed
In some situations (small estates or when the title already passes by joint tenancy or a transfer-on-death deed), probate is unnecessary. If title passes automatically to a surviving joint owner or named beneficiary, that person can handle sale without renunciations or probate paperwork. Provide the servicer with the deed or transfer documentation and the death certificate so they can update their records.
Helpful federal and Kansas resources
- Consumer Financial Protection Bureau (CFPB) — Reverse mortgages: rights for borrowers and heirs: https://www.consumerfinance.gov/owning-a-home/reverse-mortgages/
- U.S. Department of Housing and Urban Development (HUD) — HECM program information for servicers and heirs: https://www.hud.gov/program_offices/housing/sfh/hecm
- Kansas Courts — information and local probate contact points: https://www.kscourts.org/
- Kansas Legislature — statutes and legal code (search the probate and estate provisions): https://www.kslegislature.org/li/b2023_24/statute/
Helpful Hints
- Get everything in writing. Ask the servicer to list exactly which documents and forms it will accept to avoid delays or signing unnecessary documents.
- Do not sign a generic renunciation without reading it or getting legal advice. A renunciation can remove your legal rights to administer the estate.
- If you want to sell quickly, ask the servicer for a written payoff and for any time extension they will provide while you market the property.
- Work with a title company experienced with reverse mortgages. They usually handle payoff logistics and arrange for clear title at closing.
- If there is any family disagreement about who will act, consider filing for appointment by the probate court rather than relying on renunciations alone.
- If the home’s sale price may be less than the loan balance, discuss short sale or deed-in-lieu options. Keep copies of all servicer communications about alternative resolutions.
- Keep communication records (emails, letters, dates and times of phone calls) with the servicer and with family members—these are useful for court filings or disputes.
- Consider talking to a Kansas probate or real estate attorney early if the situation is complex, if multiple heirs disagree, or if the servicer’s requested documents are unclear.
Disclaimer: This article explains general information about reverse mortgages and estate procedures in Kansas. It is not legal advice and does not create an attorney-client relationship. For advice about your specific situation, consult a licensed Kansas attorney or the local probate court.