Folklore and the Reverse Mortgage
I received a phone call from a local real estate professional. She called in response to an ad I placed detailing how seniors can buy a home using the reverse mortgage to fund the purchase.
She expressed interest but not before going into a long, horrible and sad story of a friend of a friend who had an unbelievably bad experience with a reverse mortgage. I was intrigued from the get go.
First things first... The rule is you must complete this article. You can't just read what happened and then stop before I can explain. We can't have you running about telling everyone else how horrible the reverse mortgage is.
The real estate agent had a friend, who had a friend, who had a father (Strange how rumours get started) who obtained a reverse mortgage on his home. The father passed away and the house willed to the FOAFOAR (which is much easier than saying Friend Of A Friend Of A Real estate agent)
Well, more money was owed to the lender, at the time of his death, than the home was worth. According to the realtor the mortgage company required repayment of the entire amount owed.
The property eventually sold to repay a portion of the money owed the lender. The lender forced the FOAFOAR to pay the remaining balance of forty-thousand-dollars.
Did this happen? I seriously doubt it. The reason is reverse mortgages are known as non-recourse loans. This means in the circumstance of the FOAFOAR the mortgage company cannot come after the heirs for the difference.
In the circumstance of a deficiency or negative equity the borrower or estate conduct the sale of the property as follows....
The mortgage company will require a real estate agent to list and market the property for sale. In the process the realtor will furnish comparable properties so the mortgage company knows the property will be sold at a fair market value. Eventually the home is sold and the lender is repaid the sale price less closing costs.
This net figure is the maximum amount the bank has a right to extract, and can't come back after the borrower or borrower's heirs for the remaining balance of the loan. The bank eats the difference, and is reimbursed by FHA mortgage insurance.
A bunch of folklore is flying about concerning the reverse mortgage. You may have a financial obstacle in need of an answer. The reverse mortgage may or may not be a great tool for you. Make sure you have real facts at your disposal before making a decision.
She expressed interest but not before going into a long, horrible and sad story of a friend of a friend who had an unbelievably bad experience with a reverse mortgage. I was intrigued from the get go.
First things first... The rule is you must complete this article. You can't just read what happened and then stop before I can explain. We can't have you running about telling everyone else how horrible the reverse mortgage is.
The real estate agent had a friend, who had a friend, who had a father (Strange how rumours get started) who obtained a reverse mortgage on his home. The father passed away and the house willed to the FOAFOAR (which is much easier than saying Friend Of A Friend Of A Real estate agent)
Well, more money was owed to the lender, at the time of his death, than the home was worth. According to the realtor the mortgage company required repayment of the entire amount owed.
The property eventually sold to repay a portion of the money owed the lender. The lender forced the FOAFOAR to pay the remaining balance of forty-thousand-dollars.
Did this happen? I seriously doubt it. The reason is reverse mortgages are known as non-recourse loans. This means in the circumstance of the FOAFOAR the mortgage company cannot come after the heirs for the difference.
In the circumstance of a deficiency or negative equity the borrower or estate conduct the sale of the property as follows....
The mortgage company will require a real estate agent to list and market the property for sale. In the process the realtor will furnish comparable properties so the mortgage company knows the property will be sold at a fair market value. Eventually the home is sold and the lender is repaid the sale price less closing costs.
This net figure is the maximum amount the bank has a right to extract, and can't come back after the borrower or borrower's heirs for the remaining balance of the loan. The bank eats the difference, and is reimbursed by FHA mortgage insurance.
A bunch of folklore is flying about concerning the reverse mortgage. You may have a financial obstacle in need of an answer. The reverse mortgage may or may not be a great tool for you. Make sure you have real facts at your disposal before making a decision.
About the Author:
Learn about other folklore plus five monster blunders at the Reverse Mortgage Texas Guide. For great questions for your lender try 5 big league inquiries for your Texas Reverse Mortgage lender.
posted by Debt Consolidation Loan at
5:07 AM
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