Selling a Deceased Parent’s Home with a Reverse Mortgage in Indiana | Indiana Probate | FastCounsel
Get Matched
IN Indiana Probate

Selling a Deceased Parent’s Home with a Reverse Mortgage in Indiana

August 15, 2025 7 min read

Selling a Deceased Parent’s Home with a Reverse Mortgage in Indiana

Short answer: When the reverse mortgage servicer asks for “renunciation” letters, they’re trying to clear title and confirm who has authority to act. In Indiana you generally must produce documentation that shows who can sell the property (death certificate plus letters testamentary/administration, a valid deed, or legally effective renunciations/disclaimers). If those documents are not available or the heirs won’t sign, the servicer can insist on probate or a court order. The typical paths are (1) have the personal representative (executor/administrator) sell the house, (2) have heirs execute clear documents allowed by Indiana law, or (3) open probate or ask the court to appoint someone who can transfer title.

Detailed Answer — what’s going on and what you can do

This section explains how reverse mortgages work after a borrower dies, why servicers ask for “renunciations,” and the practical steps to sell the house under Indiana law.

How reverse mortgages work at death

Why the servicer asks for renunciation letters

When someone dies, title to the home may be held in the decedent’s name alone, or there may be multiple potential heirs, a surviving spouse, joint tenants, or a named beneficiary. The servicer wants to be sure that the person selling the property has lawful authority and that no one else can later claim the property. Common reasons for requesting renunciations or disclaimers:

  • To confirm heirs have no objection to the sale and will not claim an ownership interest later.
  • To confirm an heir is giving up any claim so the servicer can accept a payoff and release its lien without future claims.
  • To verify a surviving spouse or other person does not have a homestead or statutory claim that blocks transfer.

How Indiana law and process fit in

Indiana’s probate rules and property statutes control who can transfer real estate after death. Indiana’s probate laws are contained in Title 29 of the Indiana Code; review the probate title for applicable rules: https://iga.in.gov/legislative/laws/2023/ic/titles/29. The Indiana judicial branch also provides probate/self‑service information: https://www.in.gov/judiciary/selfservice/.

Practical paths to sell the house

Choose one path depending on your facts (whether there is a will, who holds title, whether heirs agree, and whether there is already a personal representative):

  1. Sell through the estate (letters testamentary/administration):

    If there is a will and the executor (personal representative) has been appointed, the executor can sign to sell the property. The servicer will accept letters testamentary or letters of administration as proof. Obtain certified copies from the probate court and provide the servicer with the death certificate plus the letters.

  2. Heirs sign clear title documents (deed or renunciation/disclaimer):

    If the estate does not go through probate and all heirs are known and willing, Indiana law allows heirs to transfer or disclaim their interests in some circumstances. The servicer may ask each heir for a written renunciation or a deed transferring their interest so the servicer can accept a payoff without fear of future claims. Ask the servicer to provide the exact language or form they require; do not sign ambiguous forms without independent advice.

  3. Small-estate or affidavit procedure (if available):

    If the estate qualifies for Indiana’s small estate procedures, you may be able to use an affidavit to transfer title without full probate. Check the Indiana probate rules (Title 29) and the local probate clerk for requirements. If the affidavit option is used, the servicer will still want satisfactory proof of authority and usually a payoff quote.

  4. Go to court for a declaratory order or appointment:

    If heirs disagree or there are unknown parties, the safest route is a probate appointment or a court order authorizing a sale. Many servicers will not accept private renunciations if there are disputes or potential statutory rights for a surviving spouse or minor children.

Common document checklist the servicer will ask for

  • Certified copy of the borrower’s death certificate.
  • Recorded mortgage and note (often the servicer has these but confirm).
  • Letters testamentary or letters of administration from the Indiana probate court, or a recorded deed signed by the legal owner.
  • If there is no personal representative: signed renunciation/disclaimer or deed from all persons with an interest, or an affidavit of heirship acceptable to the servicer.
  • A copy of the proposed sales contract (if selling to a buyer), authorization to order payoff and appraisal, and a payoff quote request.

If the servicer keeps insisting on renunciations

  1. Request in writing exactly what they need and why, including sample language/form they will accept.
  2. Ask whether a deed from the personal representative or a court order would be acceptable instead.
  3. If heirs are being asked to “renounce” an inheritance, confirm whether that is a renunciation under Indiana law or just a private release the servicer wants; a formal renunciation/disclaimer may have legal and tax consequences.
  4. If there is disagreement among heirs or uncertainty about who owns the property, open probate or ask the court to appoint a representative. A court order will typically resolve a servicer’s concerns.
  5. Consider hiring an Indiana probate or real estate attorney to (a) review any renunciation language before signing, (b) get the necessary court documents, or (c) negotiate acceptable alternatives with the servicer.

How loan payoff and sale proceeds are handled

  • The servicer will provide a payoff figure that must be paid at closing. For FHA-insured HECMs, the loan is typically non‑recourse—heirs are not personally responsible for amounts beyond the property value—but the servicer will require payment from sale proceeds or the estate to release the lien.
  • If a sale price exceeds the loan payoff and closing costs, the surplus goes to the estate or heirs according to the deed/will or intestacy rules.
  • If sale proceeds are less than the loan balance, FHA insurance may cover the shortfall if rules apply; the lender typically absorbs the deficiency on an FHA-backed HECM, but procedural steps and timing matter.

Helpful Hints

  • Get a certified death certificate early. Servicers need it to note borrower death and start the payoff process.
  • Ask the servicer to put in writing the exact documents they accept in place of renunciation letters — sample forms are often provided.
  • Before any family member signs a renunciation or disclaimer, consult an Indiana attorney — disclaimers can have tax and inheritance consequences.
  • If the house is going to be listed, tell the buyer and title company early that the property has a reverse mortgage; title companies are experienced with HECM payoffs but will want clean documentation of authority to sell.
  • If all heirs agree, a simple solution is to open probate, get letters of administration/testamentary, and have the personal representative sign the deed. It reduces the risk the title company or servicer will reject the closing documents.
  • Keep written records of every communication with the servicer — request payoff quotes in writing and verify any fees they add, including appraisal and preservation costs.
  • If the servicer will not accept notarized affidavits or heir signatures, a court order is the definitive solution. It is slower and more expensive but avoids later disputes.

Where to get help

Important disclaimer: This article explains general principles under Indiana law and HUD program rules but is not legal advice. Every situation has unique facts. Talk with a licensed Indiana attorney before signing renunciations, filing probate papers, or transferring real estate.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.