Selling a home subject to a reverse mortgage in Louisiana: what to do when the lender asks for renunciation letters

Short answer (overview): When a borrower with a reverse mortgage dies, the loan becomes due and payable. The servicer will require documentation that the right people are handling the estate or that heirs have formally accepted or renounced succession rights before it will release payoff information or allow a sale. In Louisiana, resolving this usually means getting a death certificate, opening the succession (estate) or obtaining formal renunciation or acceptance of succession by heirs, and providing the lender the legally required documents so title can be cleared and the house sold. If equity is insufficient to pay off the reverse mortgage, you may need to pursue a short sale with the servicer or work with HUD/FHA procedures for HECM loans.

Detailed answer — step‑by‑step guidance under Louisiana law

1. Identify the loan type and the servicer’s legal position

Most reverse mortgages are FHA‑insured Home Equity Conversion Mortgages (HECM). Confirm whether the loan is a HECM (look for FHA/HUD branding on loan documents or call the servicer). HECM loans are federally insured and have specific procedures after the borrower dies. See HUD HECM overview: HUD — HECM (Home Equity Conversion Mortgage).

2. Gather immediate documents

• Certified copy of the borrower’s death certificate.
• Original mortgage/HECM documents (or account number to get a payoff statement).
• Heirs’ identity documents (IDs) and any wills, trusts, or succession filings.

3. Understand why the servicer asks for “renunciation letters”

In Louisiana, succession (probate) rules are different from many states. The servicer may be asking heirs to sign statements that they:

• Renounce succession (i.e., formally decline to accept the decedent’s estate), or
• Confirm they will not occupy or claim an interest in the property that would interfere with a sale.

Renunciation affects who has authority to act with respect to the property. Lenders want to be sure the person who sells the house has legal authority so the sale will produce clear title and fully resolve the loan.

4. How acceptance or renunciation of succession works in Louisiana

Under Louisiana law, heirs may formally accept or renounce a succession. Because Louisiana follows civil‑law succession rules, these acts have formal requirements. A renunciation is a legal act that can affect who manages and disposes of estate property. For general reference to Louisiana succession law, see the Louisiana Legislature resources: Louisiana Civil Code (Succession and related provisions). Because formal requirements matter, many lenders require a court document or a notarial/attested renunciation before they will accept it.

5. Typical paths to get the house sold

1. Heirs accept succession and are appointed by the court (or act as successors) — they sign the sale documents, pay the reverse mortgage from sale proceeds, and transfer clear title.
2. Heirs renounce succession — renunciation shifts succession to other heirs or to the estate’s intestate chain; the person with authority under succession law (a curator, administrator, or other appointed person) must handle the sale.
3. If the estate does not have enough equity to pay the HECM, negotiate a short sale with the servicer or allow HUD to foreclose according to FHA rules. HECMs are generally non‑recourse to heirs when the property is sold for less than the loan balance if proper FHA/HUD procedures are followed.

6. Practical next steps you should take now

• Contact the servicer in writing. Provide the death certificate and request a payoff or reinstatement statement. Ask specifically what documents they will accept as proof of authority to sell (court appointment, act of renunciation, affidavit of heirship, etc.).
• If the servicer asks for renunciation letters, ask for a template or identification of the legal form they need and whether the renunciation must be an authentic act, filed in court, or notarized by a notary public.
• Open a succession in the proper parish court if necessary. In many cases a formal succession proceeding (even a simple one) will produce a judgment that clarifies who can act to sell the property.
• Speak with a Louisiana attorney experienced in successions and real estate or elder law. They can prepare renunciations or file for appointment of an administrator or executor so the sale can move forward.
• If short sale is required (loan > property value), ask the servicer for its short sale process and whether HUD approval is needed for a HECM short payoff.

7. Timeline and typical delays

Expect at least several weeks to a few months. Time is needed to obtain death certificates, open or resolve succession, prepare documents, and get lender payoff figures. If the servicer insists on court‑filed renunciations or formal succession judgment, the court timetable controls. Be proactive: ask the servicer exactly which documents will satisfy them so you don’t take extra steps.

8. What to do if you hit a roadblock

• Get the servicer’s requirements in writing (email or letter). This reduces disputes about what paper they want.
• If heirs disagree about accepting or renouncing, an attorney can file the proper pleadings so a judge resolves who has authority.
• If the servicer refuses to cooperate despite provided documents, escalate to HUD for HECM loans and consider filing a complaint with the Consumer Financial Protection Bureau (CFPB) or HUD as appropriate. See HUD HECM homeowner resources: HUD — HECM Q&A and borrower resources.

Helpful hints

• Always start by getting a certified death certificate and contacting the servicer — these documents unlock the process.
• Ask the servicer to list acceptable forms of renunciation or authority to sell. Different servicers accept different forms (court judgment, notarized renunciation, affidavit of heirship, or a recorded act).
• Keep written records of every call or email with the servicer, including names, dates, and what they requested.
• If you plan to sell, line up a real estate agent experienced with estate sales and reverse mortgage payoffs.
• If you are an heir who does not want the property, renunciation can limit liability for estate debts; get legal advice because renunciation has major consequences.
• When equity is insufficient, ask about short sale and whether the loan is insured by HUD; HECM procedures differ from conventional mortgages.
• Because Louisiana succession law is unique, use a Louisiana succession attorney or notary (notaries play an important role in authentic acts in Louisiana) to ensure documents meet state formalities.

Where to learn more

• HUD HECM program: https://www.hud.gov/program_offices/housing/sfh/hecm/hecm_home
• HUD HECM Q&A / borrower resources: https://www.hud.gov/program_offices/housing/sfh/hecm/hecm_qa
• Louisiana Civil Code resources (search Civil Code / successions): Louisiana Legislature — Civil Code

Important disclaimer: This article is informational only and does not constitute legal advice. It explains general steps and common issues under Louisiana law but not how the law applies to your unique facts. Consult a licensed Louisiana attorney about your situation before signing documents or making decisions affecting property or succession rights.