The answer is yes - this is one of the most common ways to get out of a reverse mortgage. Her father can quit claim the title to your wife. It has no effect on the reverse mortgage. . If the property is quit claimed while he is alive there will be no increase in the tax base. If it is an FHA insured loan (99% are) It is your father's right to "sell" the property to your wife for the full appraised value or payoff of the loan balance whichever is less. Your father can tell the lender he is exploring his financial options and ask for a payoff statement. If it seems the appraised value would be less he can request a HUD appraisal from the lender. The lender pays for it and is reimbursed by HUD. There is no need to give any personal information to the lender. Understand your rights and options and how to exercise them. S. Jolley, Reverse Mortgage Suitability and Abuse Consultant
If your father-in-law transfers title of his home to your wife, that is one of the events that will cause the outstanding amount of his reverse mortgage to become immediately due and payable. Additionally, if he did make the transfer, it would constitute a gift to your wife. So depending on that amount, your father-in-law may also have to file a gift tax return, using up part of his lifetime gift and estate tax exclusion. It doesn't mean there'd necessarily be a gift tax to pay, but reporting to the IRS would be required assuming the gift was larger than the annual exclusion (currently $14,000 per person).
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