For many St. Louis families, it starts with a servicer's envelope in a parent's mail after a death or a move into a nursing home. That letter starts a federal clock, and Missouri law decides who can sign the sale.

This applies to HECMs, the FHA-insured loans that make up most reverse mortgages, when the house is worth more than the loan. It's general information, not legal advice. For your own case, talk to a Missouri probate attorney or a HUD-approved housing counselor.

What happens to a reverse mortgage when the owner dies or moves into care?

The loan comes due. A HECM must be repaid when the last surviving borrower dies, sells or stops living in the house as a main home. Once it's due, the servicer stops paying out funds.

After a death, a co-borrower who still lives in the house keeps the loan going. A spouse who was never on the loan may be able to stay as an Eligible Non-Borrowing Spouse, though the CFPB says qualifying can be difficult. Otherwise, the servicer has 30 days from the death to send a due-and-payable notice to the estate, the heirs or whoever holds title.

A move into care runs on a longer clock. Say your parent has been in a hospital, nursing home or assisted living for more than 12 consecutive months, and no other borrower lives in the house. Then the servicer can call the loan due with HUD's approval. Your parent still owns the house, so they or someone with legal authority signs the sale. Our page on selling a house to pay for assisted living covers the care side.

Proprietary and single-purpose reverse mortgages are not federally insured, and HUD's rules below are written for HECMs. Ask the servicer which kind your parent has.

How long do heirs have to sell, and how do extensions work?

Plan around six months from the death. The notice gives you 30 days to choose a path, and HUD can add up to two 90-day extensions while you're selling or arranging a payoff.

The notice: It lists three options. You can pay off the loan, sell for at least 95 percent of the appraised value, or sign the house over with a deed in lieu of foreclosure.
30 days: HUD's rule gives you 30 days from the notice to act. The CFPB says this can stretch to six months to sell or get your own loan, so answer in writing with the family's plan.
Six months: If the loan isn't paid off, the servicer must take its first legal step toward foreclosure within six months of the death. HUD can approve more time.
Two 90-day extensions: The servicer can ask HUD for them when you show active marketing or attempts to pay off the loan. Keep the listing agreement or the signed sale contract.

The 95 percent figure matters only when the loan is larger than the house's value. When the house is worth more, the full balance is paid and the heirs keep the rest.

A slow probate case is not one of HUD's reasons for an extension, so open the estate early. Until title transfers, HUD says property taxes and insurance stay the estate's responsibility.

Who can sign the sale when the owner has died or moved into care?

While your parent is alive, they sign, or an agent signs for them under a durable power of attorney. After a death, the signer is the beneficiary on a recorded beneficiary deed or the personal representative the probate court appoints.

If your parent is in care, HUD lets the borrower or an authorized representative sell before the loan is due. A Missouri power of attorney survives a disability only if it's written as durable, and one used to sell a house may need to be recorded. If there's no power of attorney and your parent can't sign, talk to a Missouri elder law attorney first.

Start Fresh

Don’t let your house hold you back

In Mary's story, her mother-in-law, 85, had moved into a nursing home, and Mary's husband held power of attorney. Our team coordinated the payoff of a mortgage of about $41,000. The story doesn't mention a reverse mortgage. Read how Mary's family sold the house.

After a death, a power of attorney ends, apart from limited exceptions such as consent to an autopsy. If your parent recorded a beneficiary deed before dying, with the recorder of deeds where the house sits, the house passes to the named beneficiary, who signs the sale. The City of St. Louis and St. Louis County are separate, so check the right office. The deed moves the title, but the loan is still due and comes out of the sale.

Otherwise, a house in your parent's name alone usually goes through probate in the county where they lived. The court issues letters testamentary when a will names a personal representative, or letters of administration when there's no will. It can appoint an heir who lives outside Missouri. Under independent administration, which the will can authorize or every heir can agree to, the personal representative can sell without a court order. In a supervised estate, the sale needs a court order.

Can you sell a house with a reverse mortgage while the owner still lives there?

Yes. A borrower can sell at any time. The sale repays the amount borrowed plus interest and fees, and your parent keeps anything above the balance.

Selling while your parent is alive skips probate, and if the loan isn't due yet, no HUD deadline is running. Time it with the move. If your parent moves out for reasons other than health and no other borrower lives there, the servicer can call the loan due with HUD's approval. The amount owed on a reverse mortgage goes up over time, so get a current payoff figure before you set a price.

Marty H. sold his mother's house in Ferguson so she could live closer to him in Lake St. Louis. His review says her outstanding loan balance was ready to be paid off in full at closing. It doesn't say what kind of loan it was. Our page on downsizing in St. Louis covers the cleanout and the timing.

How is the payoff handled at closing?

St. Louis sales close at a title company. It pays the servicer from the sale money, and what's left goes to your parent or the estate.

Federal rules require the servicer to send an accurate payoff statement after a written request from the borrower or someone acting for them. Most home loans get a seven-business-day limit. Reverse mortgages are a named exception: the statement must come within a reasonable time. The servicer can verify your authority first and decide where requests go.

Each statement is good as of a set date, and the balance keeps growing, so a moved closing needs a new figure.

When you sell to us, a dedicated transaction coordinator handles the sale. In our out-of-state case study, the heir worked with TruTitle, the seller's attorney and a mobile notary, and the sale closed in about 30 days.

When does a cash sale make more sense than listing?

A cash sale fits when the house needs work, or when the family is far away and the HUD deadline is close. If the house shows well and you have months, listing with an agent will often leave the estate more. An active listing is also the kind of proof a servicer can use to ask HUD for more time.

Price: We pay fair prices, but not always full market value. We start from recent sales of comparable updated houses nearby, then subtract repairs and the costs we carry, like closing costs and taxes during the work. You see each line, and our page on how we buy houses shows the method.
Timing: We can make an offer within 24 hours. We can close in as little as 7 days when the title is clear; 30 to 60 days is typical. After a death, title can't transfer until someone has authority to sign.
Condition: We buy as-is, in any condition, including older St. Louis houses with knob-and-tube wiring or a stone basement.
Costs: There's no agent or commission, and no closing costs are passed to you. A listing pays commission and seller costs out of the proceeds.
Equity: What's left after the payoff belongs to the estate either way, so that's the number to compare.

Set our written offer beside an agent's estimate, then subtract the payoff, the selling costs and the months of taxes and insurance from each. Our page on selling an inherited house in St. Louis explains how we work with heirs, including heirs who live out of state.

Frequently asked questions

Do the heirs have to pay the reverse mortgage out of pocket?

No. A HECM is repaid from the house. The borrower has no personal liability, the lender can collect only through a sale of the property, and it can't get a deficiency judgment. Heirs can let a sale pay the loan or sign the house over. If the loan is larger than the house's value, a sale for at least 95 percent of the appraised value settles it.

Will the lender take the house?

Only if nobody acts. If the loan isn't paid off, the house isn't sold and no deed in lieu is signed, the servicer must start foreclosure within six months of the death. HUD can approve more time. HUD's rules also make the servicer accept a deed in lieu filed within nine months of the due date, if it can get good title.

Can we keep the house?

Yes, by paying off the loan. HUD's guide for heirs says the balance must be paid in full to keep the home. The CFPB notes that heirs may need a loan of their own, and that the 30-day window may stretch to six months to get one. Ask the servicer for the payoff figure in writing, and talk to a lender early.

Who talks to the servicer?

Anyone in the family can report the death. HUD lets the servicer take that by phone, though it needs documentation of the death later. Decisions and payoff requests come from whoever has authority: your parent's agent while they're alive, then the beneficiary on a recorded beneficiary deed or the personal representative. The servicer may verify that authority first, and an attorney you hire can request the payoff for you.

How long does the servicer take to send a payoff figure?

There's no fixed deadline for a reverse mortgage. Most mortgage servicers get seven business days after a written request, but reverse mortgages are named as an exception that must be answered within a reasonable time. Send your request in writing, to the address the servicer gives, once a sale is in view. Ask again near closing, because each figure is good only as of a set date.

What if the house needs repairs before it can sell?

HUD's options for heirs come with deadlines, and none of them requires repairs. We buy houses as-is, including older St. Louis houses with knob-and-tube wiring or a stone basement, and the offer subtracts the repair cost line by line. If the house is in good shape and the deadline is months away, small fixes before a listing may pay off. Compare their cost with the taxes, insurance and interest the estate carries meanwhile.

When you're ready

If you're handling a parent's house with a reverse mortgage, we can put a written offer beside the payoff figure. The choice stays yours. See how we work with families on our inherited house page, send us a message, or call (314) 334-1481.

Selling a House With a Reverse Mortgage in Missouri: What Heirs Need to Know