Title Tale: Helping a Family Keep the Home Mom Left Behind
Written by: Mylene Marcelo, Title Manager/Title Officer
After their mother passed away, her children weren’t sure how to handle the home she left behind. By the time they sought an attorney’s help, the property was already in foreclosure.
Their lender helped them find a way forward: a reverse mortgage that would allow the older sibling to pay off the existing loan and keep the home. Before the loan could close, the estate and trust documents needed to be reviewed to confirm the borrower’s individual ownership and authority to mortgage the property.
In this California file, the mother’s Will directed that the property pass into a trust, and the probate court order carried out that direction. The proposed borrower served as executor and trustee. Two beneficiaries signed disclaimers of their interests, intending to allow their older sibling to keep the property and obtain the reverse mortgage. The borrower, acting as trustee, then signed a deed transferring the property to himself individually.
The family’s goal was clear, but the documents needed to support each step. What did the will and court order direct? Who was entitled to receive the property under the trust? How did the disclaimers act distribution? And what authorized the trustee to transfer the property to himself?
A trustee holds legal title in a fiduciary capacity for the benefit of the trust’s beneficiaries. That is different from owning the property individually. Our review therefore focused on whether the court order, trust provisions, and beneficiary documents supported the transfer from the borrower as trustee to himself as an individual. The effect of the disclaimers also needed review; a disclaimer does not necessarily cause an interest to pass to the person the family intends.
The documents needed can differ from one file to another. When property has been distributed to multiple beneficiaries, deeds from those owners may be needed to place title in the borrower’s name. When title remains with the trustee, the review focuses on the trustee’s authority and the documents supporting the proposed distribution. Disclaimers and deeds serve different purposes and are not interchangeable.
With the home already in foreclosure, time was of the essence. While the title review was underway, financing and closing preparations needed to move forward. That meant staying in close contact, obtaining a current payoff, confirming the foreclosure sale status, and securing written confirmation of any approved postponement.
An open escrow, pending refinance, or payoff request does not by itself stop a foreclosure sale. Any postponement needs to be confirmed with the servicer or foreclosure representative. If the sale has already occurred, the file requires further underwriting review before proceeding.
Getting documents to title early gives everyone more time to address these issues. The will, probate orders, trust documents, deeds, and any beneficiary disclaimers should be submitted as soon as they are available, along with foreclosure notices and any scheduled sale date. Identifying missing information early can make a difference when time is limited.
At Allegiant Reverse, our title and escrow teams work together to support that process. Title reviews ownership and signing authority and identifies what is needed to insure the transaction. Escrow helps gather documents, obtains payoff statements, and coordinates closing requirements and deadlines with the lender, servicer, and family’s attorney. Clear explanations and timely follow-up to help everyone understand what still needs to be done.
The reverse mortgage paid off the existing loan, allowing the older sibling to keep the family home. Getting to that closing took everyone—the family, their attorney, the lender, and our title and escrow teams—working through each issue together.
Every role mattered, because every completed step brought the family closer to keeping their home. At Allegiant Reverse, we’re proud to have been part of that effort and to have helped this family move forward after a difficult loss.
