How the Housing Law Affects Reverse Mortgages

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Wpretfss of VT @ Jul 13, 2009 17:17:59 PM

Got reverse mortgage april 2006 paid 25kfor the loan what now?

i just typed the whole story and could not enter the email

where is my already typed

here i go again but am out of time at the library

I asked many ?s for one year because of need to protect myself with sever adhd and other learning disablities

I was told after one year I owuld ahve to payd for 2 to 4k aprraisal or get one with the reverse .

I was scared and overwhelemd.

I was told as a pecial favor she had invited another lady named nancy to teah me how to to e bay consing business at the verysame time we ere signing the reverse mortgage papers

I was scared and finally said after one half hour I cant do both and i am very sorry.

Today i would walk ..

what can I do? and how can I do it? I was duped

diana m green of CA @ Jun 01, 2009 22:55:38 PM

reverse mortgage

My father did a reverse mortgage on his home on November 3, 2008 and he passed away on April 24, 2009. His orignial loan balance was around 44500.00 and as of the end of April 2009 the balance on the loan is 47500.00. Dad did not leave a will or a letter of appointment. We contacted the reverse mortgage company and they will not give us any information because there is no on in charge of the estate. Our thoughts are since there is no one appointed, there monthly charges are so high, the market is not good currently for selling homes and especially the area his home is in is even worse. So we thought the best thing to do is just let the reverse mortgage company foreclose on the house, since there is no money to do anything else, and with the monthly charges it won't take long for the loan balace will be over the amount the house is worth. Any suggestions?

Deb Connor of IL @ May 22, 2009 11:26:26 AM

reverse mortgage

to whom it may concern

my husband died dec 2006 leaving a reverse mortgage on our property without my consent or knowledge. he was 68yrs i am 59yrs now.he stated that he was not married on the contract(we were married 38 yrs)at the time.anyhow i did not get any of the money he obtained, can't sell of course because of the market problems. Myself, Bank of America, and HUD are currently in court.the thing is i am stuck paying the bills on the property- insurance, property taxes,maintenace etc. i do not have money for a lawyer-none of the agencies recommended by the court were able to help-i have tried so many places.(you won't beleive the problems that i have had. the case is still continued in court so far) when i told the judge the story he put his hands over his face and gave a continuance for now. i knew nothing until my husband died after a long illness in dec 2006. no on bothered to check out the truth of the application-but his lawyer knew, and the financial counsler also. now i am out of a house if i cannot find a way to refinance. i have lived in and helped pay for this house since 1971. thanks

Joyce Halsell

Joyce Halsell of IL @ Nov 10, 2008 21:26:18 PM

Frank & Patricia Esposito

Hi Frank,

I am with a NJ reverse mortgage lender that currently is not licensed in NY- so please don't think of this as a sales pitch as I will not gain anything from this explanation.

Given your age, and the age of you wife, under the new law you would be entitled to approximately $250,000. Given that your home is worth substantially more than this, I can see why you may have reservations about taking a reverse mortgage on your property.

A reverse mortgage should be thought of as a home equity loan that doesn't get paid back until you permanently vacate the home. What this means for you is that the remaining equity in your home, which is about $300,000 goes untouched except for any interest and fees accrued on the loan. If, for example, you took a reverse mortgage today for the full amount of $250,000 and decided to sell your home in 5 years, the only additional reductions to your home’s equity would be the interest that accrued against the loan. Thus, you are not losing your remaining equity.

Additionally, as the borrower remains the sole owner of the home, should both borrowers pass on, any value remaining in the home will be passed onto their heirs. In this sense, the process is quite similar to a home equity loan. Either the loan can be satisfied by the heirs and they can keep the home, or more often than not, the home is sold and the loan is satisfied. A feature unique to reverse mortgages is the MIP insurance which ensures that the value of the loan never exceed the value of the home. This has been an important characteristic of these loans as of late. To illustrate the purpose of this insurance here is an example: A borrower owned a $350,000 home in 2005 and took a reverse mortgage for $275,000. Now, in today's housing market the home is worth only $295,000 but the mortgage, due to accrued interest is $315,000. This $20,000 difference will not be passed onto the estate or your heirs, but will be absorbed by the MIP insurance. Unfortunately, contrary to the above article, this is not a negotiable fee as it is set by the FHA and HUD at 2%. In fact, the lender never sees this money as it goes directly into a special federal government pool.

I hope that elucidates some of the complexities of the program. As a member of the industry I find that the greatest problem that we face is the misinformation that has been given to seniors about reverse mortgages. Many people could truly benefit from this program, though it is not right for everyone. It is important to deal with principled lenders when taking a reverse to ensure that a program is designed to fit your needs and is only implemented if it is the best option for the borrower and if fully understood.

I am happy to answer any questions that you, or any other readers may have about reverse mortgages so please call or email me with your concerns.

Best,

Josh Fishkind

The Reverse Mortgage Center, LLC

P: 732 542 9400

F. 732 542 0927

E. jfishkind@thereversemortgagecenter.net

Josh Fishkind of NJ @ Oct 15, 2008 09:38:07 AM