Court of Chancery Magistrate Recommends Mandating the Sale of Estate Property to Satisfy Reverse Mortgage Debt
IMO Estate of Reginald E. Watson, Sr., C.A. No. 2025-0063-DG (October 28, 2025)
In a recent opinion from the Delaware Court of Chancery, Magistrate in Chancery Danielle Gibbs recommended that the personal representative of the Estate of Reginald E. Watson, Sr. (the “Estate”) be required to sell real property owned by Reginald E. Watson, Sr. (the “Decedent”) to satisfy a reverse mortgage debt. The Magistrate found that the Estate lacked sufficient assets to pay its obligations and that its personal representative, the Decedent’s granddaughter and Respondent, Myesha Moorefield (“Moorefield”), had not demonstrated just cause to prevent the sale.
The matter centered on a petition filed by GitSit Solutions, LLC (“GitSit”), a holder and servicer of home mortgages. In January 2024, GitSit acquired the note and reverse mortgage executed by the Decedent from the U.S. Department of Housing and Urban Development (“HUD”). The loan originated in 2011 when the Decedent entered into a fixed-rate home equity conversion loan, commonly known as a reverse mortgage, secured by up to $288,000 against his home at 2601 Baxter Avenue, Wilmington, Delaware (the “Property”). Under the terms of the mortgage, the lender was entitled to satisfy the debt through the sale of the Property upon the Decedent’s death.
Although the Decedent passed away in 2021, no estate was opened until GitSit’s counsel initiated a claim against the Estate in 2024, seeking to satisfy an outstanding debt of approximately $310,000. Moorefield did not challenge the timing of the filing or GitSit’s evidence concerning the amount of debt or the accrual of interest.
At the evidentiary hearing in July 2025, GitSit presented testimony from its asset manager, who explained the mortgage’s assignment history and described HUD’s standard practices for federally insured reverse mortgages, including the use of dual mortgages and undated allonges (the latter of which are papers attached to an instrument in order to allow for extra signatures and the like). Moorefield, on the other hand, argued that the documents were defective and asked the Court to exercise discretion under 12 Del. C. § 2717 to decline ordering a sale, citing her emotional connection to the Property, which was her childhood home, and her belief that her grandfather intended it to remain in the family. She also questioned the propriety of GitSit, a third-party lender, opening the estate several years after the Decedent’s death.
While the Magistrate recognized Moorefield’s sincerity and lack of legal experience, the Court determined that her challenges did not seriously call into question the validity of the documents or assignments. The Court emphasized that the reverse mortgage allowed, upon the Decedent’s death, for the noteholder’s immediate right to claim ownership of and sell the Property, and that GitSit had properly invoked its rights to compel a sale. The Magistrate therefore recommended that Moorefield be ordered to sell the Property to pay the outstanding obligation.
For Delaware estate practitioners, this decision highlights the importance of timely estate administration, particularly when dealing with secured debts such as reverse mortgages. This case also serves as a reminder that the Court of Chancery expects strict compliance with statutory procedures when administering estates burdened by secured debt. Even compelling personal circumstances, such as a family member’s longstanding connection to the property, do not override the lender’s contractual rights. Early estate administration and transparent communication with lenders can help avoid the procedural and emotional difficulties reflected in this case.
This blog entry was primarily authored by Sehee Hwang and Christina Smith.
