Detailed Answer

Short answer: After a borrower with a reverse mortgage dies, the loan becomes due. To sell the house you will normally need to work with the loan servicer to get a payoff figure and clear title. If the servicer keeps requesting “renunciation” letters, they are usually seeking evidence that certain people are renouncing the right to serve as estate representative so that one person can act (or that heirs are disclaiming an interest). In Vermont you can resolve this by either opening a probate estate and obtaining letters testamentary/administration, obtaining the required renunciations and filing them with probate, or supplying whatever alternate recorded or court documents the servicer will accept (small‑estate affidavit, affidavit of heirship, or a court order). The usual practical route is to open probate or have an attorney arrange the renunciations so the sale can close.

How reverse mortgages work on death (plain language)

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs), federally insured through HUD. When the last borrower passes away or otherwise no longer lives in the home as a primary residence, the loan becomes due and payable. The servicer will contact heirs to explain options: repay the loan and keep the home, sell the home and use sale proceeds to pay the loan, or allow the lender to foreclose. The servicer must also get clear, reliable proof of who has authority to act for the estate.

What “renunciation” usually means here

In a probate context, a renunciation is a formal written statement in which a person who would otherwise be entitled to be appointed as the estate’s personal representative (executor/administrator) gives up that right. Lenders ask for renunciations when multiple potential personal representatives exist and the servicer needs one person with clear authority to sign payoff and closing documents. In other situations a servicer might be asking heirs to disclaim (renounce) their ownership interest so title can transfer.

Steps to take in Vermont if the lender keeps asking for renunciations

1. Gather basic documents: death certificate, the lender’s last statement and contact name, the mortgage note or servicer contact, the deed, any will, and a list of heirs. These let you speak intelligently with the servicer and the probate court.
2. Ask the servicer to explain exactly what they need, in writing: Are they asking for a renunciation of appointment as personal representative? A renunciation of inheritance? A specific probate court form? Ask for the specific document name and the reason. Get a written payoff or expiration date for any request.
3. Review the estate situation: If there is a will, who is named as executor? If no will, who are the heirs under Vermont law? The person with priority to be personal representative often will need to be appointed by the Probate Division of the Vermont Superior Court.
4. File for probate or for a small‑estate procedure, if appropriate: If the estate will be probated, the court can issue letters testamentary or letters of administration. If multiple people could serve and some do not want to serve, those people can sign renunciations in the form the probate court requires so a single representative can be appointed. Vermont’s probate court (Superior Court, Probate Division) handles these filings; the court can also accept renunciations and record them so the servicer will accept them.
5. Consider a small‑estate affidavit or other affidavit of heirship (only if the servicer will accept it): Some servicers accept a signed affidavit of heirship or a small‑estate process instead of full probate for low‑value estates. Check with the servicer and the Vermont probate court whether a small‑estate method is allowed for the property value and lender requirements.
6. If co‑heirs refuse to sign renunciations: You can ask the probate court to appoint a representative over objections. The court has power to appoint an administrator and to resolve competing claims. The servicer will accept appointment documents from the court.
7. When selling: Once a single personal representative (or a buyer approved by all heirs and the servicer) has authority, get a written payoff, list the home, and proceed to closing. Sale proceeds are used to pay the reverse mortgage first. Any remaining proceeds are distributed by the personal representative according to the will or Vermont intestacy rules.
8. Get legal help if the servicer stalls or makes unreasonable demands: If the lender repeatedly rejects valid probate documents or asks for unusual paperwork, consult a Vermont probate/real estate attorney. An attorney can file the right documents with probate court or negotiate with the servicer so a sale can close.

Practical examples (hypothetical)

Example A: Three siblings are heirs. The eldest signed a petition to be appointed personal representative; the other two sign formal renunciations in the probate packet. The court issues letters of administration to the eldest. The servicer accepts the letters and a payoff, the home is listed, and it sells.

Example B: There’s no will, and heirs refuse to sign renunciations. One heir asks the probate court to appoint them as administrator despite objections. The court appoints them and issues letters. The servicer accepts the court appointment and issues a payoff so the sale can proceed.

Key Vermont resources and federal guidance

• Vermont Judiciary (Probate information and court contacts): https://www.vermontjudiciary.org/
• U.S. Department of Housing and Urban Development — HECM (reverse mortgage) program information: https://www.hud.gov/program_offices/housing/sfh/hecm
• Vermont Legislature (state statutes search and general statute resource): https://legislature.vermont.gov/

When to hire a Vermont attorney

Consider hiring a Vermont probate or real estate lawyer if:

• Co‑heirs will not cooperate or refuse to sign required renunciations;
• The servicer refuses to accept probate court documents you have provided;
• There are title disputes, unknown heirs, or potential creditor claims; or
• You need help quickly to meet a buyer’s closing deadline.

How an attorney helps: prepares and files the correct probate petitions and renunciations, obtains letters testamentary/administration, negotiates with the loan servicer, and clears title so the sale can close.

Common timeline and expectations

Expect at least a few weeks to several months depending on whether you must open probate, whether co‑heirs cooperate, and how quickly the servicer processes documents. A straightforward probate with cooperating heirs and an agreeable servicer can often be resolved in 4–8 weeks; contested or complex matters take longer.

Disclaimer

This information is for educational purposes only and is not legal advice. For advice about your specific situation, consult a licensed Vermont attorney or the Vermont Probate Division.

Helpful Hints

• Get everything in writing from the servicer: the exact document name they need and a written payoff estimate with expiration date.
• Collect and preserve the death certificate early — servicers require certified copies.
• If multiple heirs could serve, get signed renunciations from those who don’t want to be appointed so one person can act.
• Ask the servicer whether they will accept a small‑estate affidavit or affidavit of heirship to avoid full probate.
• If a buyer is lined up, tell the servicer about any closing deadline; sometimes lenders can expedite review with all proper court documents.
• Document every conversation with the servicer (date, name, and what they said). This helps if disputes arise.
• If the servicer appears to demand improper or unnecessary documents, an attorney can write a short demand or file with probate to move things forward.
• Remember: sale proceeds first pay the reverse mortgage. Plan for potential shortfalls and know the servicer’s buyout or payoff calculations.