Your Questions About Reverse Mortgage

Lisa asks…

Is it a good idea to take reverse mortgage?

My mum and dad are going to retire in 5 five years and the superannuation is not enough to have a good pension so is it a good idea to take reverse mortgage on our family home hence they can live there retirement years to the full

admin answers:

Your parents are still young. They could easily out live their equity and end up loosing their home. If they had retired 10 years ago this would be an OK idea, but considering their age this could be a disaster.

Joseph asks…

My mother and I are both on the deed to our house. She is 90. Can we still apply for a reverse mortgage?

I am 48. Does my name being on the deed prevent us from applying for the reverse mortgage?

admin answers:

Hi Bobby,

You have to love these open forums….sometimes you get everything but the answer to your question.

The answer to your question is YES. What would happen is you can still stay on title and Mom would be given a “Life Estate”. What this means is Mom retains all her legal rights to the property and at her demise the house automatically goes to you, bypassing probate, and you get the house at what is known as the stepped up value. What that means is you get the house at the current market value instead of what Mom paid for it. The benefit here is that you will not have exposure to Capitol Gains taxes.

This is a very simple procedure, and one that is very common in situations such as yours. The Lawyer simply writes up a Life Estate, you and Mom sign, and it gets recorded along with the Reverse Mortgage.

Bobby for disclosure purposes….I work for EverBank Reverse Mortgage…a Nationwide Reverse Mortgage Bank, and all we do is Reverse Mortgages. I am also the Producer/Host of a daily radio program in the Boston Market called Senior Solutions Radio. If you have any other questions, or if you would like me to assist you and Mom in the Reverse Mortgage, simply let me know. Thank you and I hope this helps.

Regards,
Stephen Greenberg

Jenny asks…

can we negotiate a different payoff for a reverse mortgage?

My father passed away recently. He had a reverse mortgage. we received a letter from the rev. mortgage company telling us the final amount due to pay off the loan. Is it possible to negotiate a lesser amount for the payoff? They charged outrageous fees on the loan and I don’t feel they deserve the payoff amount. The house has already been sold to new owners. If we tell the mortgage company we are not paying, what is their recourse?

admin answers:

When the sale closes, the title company will cut a check for the payoff. You’ll never see the proceeds, except for whatever remains after the payoff. The lien will not be released until the loan is satisfied. The lender’s recourse is to foreclose on the house. You are the one without recourse. If you never settle the loan, the lender will take care of things himself, and you won’t even get the remainder of the proceeds.

My company doesn’t negotiate payoffs on reverse mortgages. You may think the fees are outrageous, but it wasn’t your mortgage. The fees were disclosed before the application was even taken, and there was counseling by an impartial third party to make sure your father knew what he was getting. Many of the fees have nothing to do with the lender, like the FHA mortgage insurance. In fact the origination fee is the only thing that goes to the lender.

Your father lived in the house for some number of years without having to make a payment or maybe even getting a supplement to his income. The house is probably worth less today than it was when he got the reverse. Who are you to say the lender doesn’t deserve what your father agreed to pay? If you think the lender tricked him or wasn’t fair with him, maybe you should have been watching out for him then.

This is not an inexpensive loan, but it allowed your father to live in his home. If he didn’t need the loan, he should not have gotten it. Without that mortgage insurance, no lender would consider assuming the risk for this type of loan.

Now that my ire has subsided, I’ll tell you what to do. Call the servicing department and ask them. When they tell you no, try short sale. But you are not a party to the loan and you have no standing to negotiate. The estate owes the lender the money, and lender will get it.

Maria asks…

i have a reverse mortgage on our property, can i still file for bankrupcty?

we went into a reverse mortgage program,and our finances have gotten worse,need to know if we can file bankruptcy and still keep our property, please help.

admin answers:

No. A reverse mortgage usually means they own your house and you are only paying interest, no principal… If you can no longer pay, you will lose it.

Lizzie asks…

Do I lose my home with a reverse mortgage ?

Basically, how does a reverse mortgage work ?

admin answers:

Hello,

No, you will not lose your house.

Here is a short definition of reverse mortgage:
A reverse mortgage (or lifetime mortgage) is a loan available to seniors, and is used to release the home equity in the property as one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (e.g., into aged care).

So you will not lose your house till you die.

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