Comments on: Lenders, feds move to address reverse mortgage defaults http://blogs.reuters.com/reuters-wealth/2011/01/21/lenders-feds-move-to-address-reverse-mortgage-defaults/ Fri, 05 Dec 2014 11:27:18 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: JohnVeram http://blogs.reuters.com/reuters-wealth/2011/01/21/lenders-feds-move-to-address-reverse-mortgage-defaults/comment-page-1/#comment-4737 Tue, 26 Apr 2011 18:59:30 +0000 http://blogs.reuters.com/prism-money/?p=6128#comment-4737 Reverse Mortgages are not only for those who are in the low income category I was reading on this site http://www.reversemortgagelendersdirect. com/ and there was an article where a couple had a home worth $3 Million paid off but they needed money in order to pay the maintenance, taxes etc for property , they should increase the limit for people in this category, right now the limit is $625,000

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By: Mark Miller http://blogs.reuters.com/reuters-wealth/2011/01/21/lenders-feds-move-to-address-reverse-mortgage-defaults/comment-page-1/#comment-2534 Thu, 27 Jan 2011 21:58:35 +0000 http://blogs.reuters.com/prism-money/?p=6128#comment-2534 Cantorjanice – good question. Answer: what’s different here is that reverse mortgages are intended to help keep seniors who might be financially strapped (e.g., trouble paying for things like insurance and taxes) in their homes. Instead, defaults are taking place because the funds generated by the reverse are gone, in many cases to pay off a traditional forward mortgage.

Mark Miller

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By: cantorjanice http://blogs.reuters.com/reuters-wealth/2011/01/21/lenders-feds-move-to-address-reverse-mortgage-defaults/comment-page-1/#comment-2526 Thu, 27 Jan 2011 16:57:14 +0000 http://blogs.reuters.com/prism-money/?p=6128#comment-2526 Gee, what happens to a person who has no mortgage at all and doesn’t pay his taxes? He will lose the property to a local tax sale. I don’t see why a reverse mortgage is even mentioned in the same paragraph with this problem. One has nothing to do with the other.

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By: tobinsmith http://blogs.reuters.com/reuters-wealth/2011/01/21/lenders-feds-move-to-address-reverse-mortgage-defaults/comment-page-1/#comment-2453 Tue, 25 Jan 2011 02:11:27 +0000 http://blogs.reuters.com/prism-money/?p=6128#comment-2453 The HECM program is not an entitlement program- when a senior homeowner takes the mandatory HUD housing counseling session they make sure the borrower understands taxes, insurance and upkeep are REQUIRED. Can’t follow the rules, you’re not qualified to have this type of loan.

When the borrower signs the application there is more than one document that clearly indicate insurance must remain current or the lender has the right to provide Lender Placed insurance coverage at the borrowers expense. If taxes are not paid the loan will be in default and the lender may use any available collection remedies, up to and including foreclosure. Even without the reverse mortgage, a homeowner with no mortgage at all is required to maintain property taxes at minimum or face losing the property to local tax sale.

These are documents the borrower signs to secure the loan and must be honored like any other stipulation attached as part of an agreement to borrow money. What the industry does not need is a new regulation that treats these folks like little children that can’t understand the ramifications. At some point people are going to have to honor their agreements. There are no free rides. The reverse mortgage is a wonderful financial vehicle created to allow a senior homeowner the ability to tap back into the equity they built over years of paying the mortgage (on time)- but it has its limits if not properly used and education of its merits are dearly needed across the financial spectrum.

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