PLANNING YOUR ESTATE? DON’T JUST SAY “LET THE BANK TAKE IT BACK.”
If you have a reverse mortgage it should come as no surprise that once you are gone the bank will eventually get around to foreclosing on the property. It is very important for your heirs to know how much the property is worth and if there will be any cash left for your estate once the lien holder is paid back. Otherwise, this cash will be lost when the bank forecloses.
Even if you are upside down on your loan, instructing your heirs to do a short sale is a socially responsible, proactive alternative to foreclosure for those concerned about the effects of their actions on family, friends and neighbors after they are gone. These include:
Reducing exposure to tax liability on forgiven debt on the unpaid balance.
Reducing exposure to deficiency judgments on the unpaid balance.
Reducing HOA for neighbors if dues are not paid, potential liens and preemptive foreclosure.
Increased quality of county services if taxes are kept current.
Increased community property values for your neighbors if the property is maintained.
Increased community property values for your neighbors by avoiding “dumping” of the property by the bank.
A Broker Price Opinion (BPO) should be part of your periodic estate review to determine what if any your equity position is. BPOs are not appraisals, but similar methodology is used. BPOs are often used by banks to determine the market value of their real estate holdings or to validate an appraisal. An appraisal can cost between $300 and $500. I do not charge homeowners, estate trustees or their attorneys for my BPO’s.
Call me at 760-610-9282 with questions or to order your no cost, no obligation BPO. If you have an estate planner, financial planner, or attorney I encourage you to speak to them as well and have them call me if they have any questions. If you don’t feel like thinking about it right now, please print this letter and place it with your estate papers for future reference
Lance Frank, Broker Associate Berkshire Hathaway Home Services California Properties 78-297 Hwy 111 La Quinta, CA 92253 760-610-9282 Relax@LanceFrank.com