Mortgage insurance began in the United States in the 1880s but the industry first enjoyed major growth following the implosion of the 1920s real estate bubble. In the 1950s, Milwaukee lawyer Max H. Karl invented the modern form of private mortgage insurance, which helped to put home ownership within reach for millions of families. Private…Details
Do you have too much house? Are you considering downsizing but concerned about qualifying for a new mortgage? Perhaps a reverse mortgage for purchase may be a problem solver for you. Since 2008 a little known product called a reverse mortgage for purchase is available for people over 62 who wish to downsize to a…Details
It’s not commonly done nor is a commonly known that you can make payments on reverse mortgages. It is acceptable to make payments on reverse mortgages and may make sense for you to do so for your future. HOW REVERSE MORTGAGES WORK: Reverse mortgages liquefy a portion of your homes equity creating increased cash…Details
Have you looked at reverse mortgages in the past but put the idea aside because your spouse is under the age of 62? Well, it might be the time to take a look at the program again, because there’s a new change in policy that could affect your decision. HUD recently changed its policy concerning…Details
1. Why is the loan amount on the deed of trust more than the maximum claim amount for that county? Due to the fact that there is no maturity date on a HECM loan, HUD has designed a calculation by increasing the amount on the deed of trust by 1 and 1/2 times the national…Details
Reverse mortgages have become an increasingly important financial tool for people 62 and older who want to remain in their home and fund their retirement. One half of all reverse mortgages were made in just the last couple of years. With over 78 million baby boomers approaching retirement, reverse mortgages are no longer mortgages of…Details
The application process for a reverse mortgage generally takes an average of 90 days from start to finish and has five major steps. However, the longest part of the reverse mortgage process is the decision-making process that leads up to the application. Because reverse mortgages are highly regulated, it is not unusual for lenders to…Details
The Consumer Financial Protection Bureau (CFPB) is seeking information from consumers about their reverse mortgage experiences. They will use the information that is submitted to determine whether new regulations are needed and to inform their suggestions to Congress. If you have a reverse mortgage or considering a reverse mortgage, tell the CFPB what you think…Details
The National Reverse Mortgage Lenders Association has launched a borrowing with confidence campaign for reverse mortgage borrower. The association created a “Roadmap” for reverse mortgage borrowers and potential borrowers to guide them in the process. This month we will discuss what happens when your loan becomes due.
As a reverse mortgage borrower you are not required to make any monthly payments on your loan. The loan is paid off when you or your surviving spouse no longer resides in their house as their principle residence.
The reverse mortgage is a non-recourse loan, which means your heirs are not responsible for any remaining loan balance if the balance exceeds the value of your home. The mortgage insurance you pay to FHA will pay off the debt for you. Any remaining equity in your home is retained by your estate if they sell the home.
When a person on the reverse mortgage passes, the remaining spouse is responsible for informing the loan servicer. In addition the heirs must notify servicer, with all the borrowers have passed away within 30 days. Servicers do audit deaths of reverse mortgage borrowers. Any payments made to borrowers stop at this time. Interest on the reverse mortgage insurance premiums and homeowners insurance continue to whom tell after the reverse mortgage is settled. The servicer will notify the heirs that the reverse mortgage is now due and payable. The loan can be paid back of other resources or by selling the home. If there is balance from the home sale after the reverse mortgage is paid it belongs to the estate.
If all reverse mortgage borrowers on title sell the property, passed away, or do not maintain the property as their principal residence for a period exceeding 12 months, this is called a maturity event. A maturity event means the loan is due and payable. It is very important that your estate communicate with the servicer to ensure the loan is paid in a timely manner.
The estate will have six months to satisfy the debt. If the debt is not satisfied within six months, they may request to 90 day extensions. Again, it’s very important that your estate communicate with the servicer as to their intentions process of repaying the loan. If the estate is actively working to refinance your property or to sell it, they may be asked to provide documentation of the process.
You may want to print out a copy of this article and put it with your will or living trust. It might also be advisable to discuss it with the person or family member who will be in charge of settling your estate.
If you have any reverse mortgage questions, please call me, Angella 866-949-7030. Is my pleasure to be of service.Details