What steps are needed to probate and list a house with a reverse mortgage in North Carolina before lender foreclosure?

Probating a home with a reverse mortgage can feel urgent when the lender threatens foreclosure. In North Carolina, you must settle the estate, secure authority to sell real property, and clear the reverse mortgage lien. This guide walks you through each step under North Carolina law.

1. Open Probate Administration

1. Determine the type of proceeding. If the estate holds any real property, including a home with a reverse mortgage, you need formal administration. Summary proceedings (§ 28A-19-1) only apply to personal property under $20,000.
2. File a petition. File a Petition for Probate of Will and Appointment of Personal Representative at the Clerk of Superior Court in the county where the decedent lived. See N.C. Gen. Stat. § 28A-2-1: ncleg.gov/GS_28A-2-1.
3. Obtain Letters Testamentary or Letters of Administration. The clerk issues these once the petition is approved and any required bond is posted.

2. Notify Heirs and Creditors

4. Serve notice on heirs. Send written notice to all heirs and devisees named in the will.
5. Publish notice to creditors. Publish a notice once a week for three successive weeks in a newspaper. This complies with N.C. Gen. Stat. § 28A-19-1: ncleg.gov/GS_28A-19-1. Creditors have three months after the first publication to file claims.

3. Inventory and Lender Communication

6. Prepare an inventory. List all estate assets, including the home and the reverse mortgage balance. File it within 90 days of appointment.
7. Notify the reverse mortgage lender. Send the lender a copy of your appointment papers. Request a payoff statement and demand notice. Under federal HUD rules for Home Equity Conversion Mortgages (HECM), the loan becomes due upon death of the last borrower or non-borrowing spouse.

4. Obtain Authority to Sell the Property

8. Check heir consent. If all heirs and the surviving spouse agree in writing, the personal representative can sell real property without a court hearing under N.C. Gen. Stat. § 28A-15-3: ncleg.gov/GS_28A-15-3.
9. File a petition to sell. If any heir objects or you lack unanimous consent, file a Petition for Sale of Real Estate. Give notice of hearing to heirs, devisees, and creditors at least ten days before the hearing.
10. Attend the hearing. The judge will review the sale terms, ensure fair market value, and issue an order authorizing the sale.

5. List and Sell the Home

11. Choose a real estate agent. Work with an agent familiar with estate sales and reverse mortgage payoffs.
12. Market the property. Disclose that a reverse mortgage must be paid off at closing. Highlight features that attract buyers quickly.
13. Review offers and seek court approval. If the sale order requires, submit the purchase contract to the court for final approval before closing.
14. Close the sale. Use the sale proceeds to pay the reverse mortgage lender first. Then cover closing costs and estate expenses. Distribute any remaining funds to heirs under N.C. Gen. Stat. § 28A-15-1: ncleg.gov/GS_28A-15-1.

Key Points to Remember

• Formal probate is required when real property exists.
• Creditors get at least three months’ notice to file claims.
• You must notify the reverse mortgage lender and get a payoff statement.
• All heirs’ written consent can simplify the sale process.
• Court approval protects you from future challenges.
• Sell quickly but at fair market value to avoid foreclosure.

Probating and selling a home with a reverse mortgage involves strict deadlines and specific court steps. Pierce Law Group has attorneys experienced in North Carolina probate and real estate sales. Let us guide you through the process and protect your loved one’s estate. Contact us today by emailing intake@piercelaw.com or calling (919) 341-7055.