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Lori Said:

trustee wont sell home with reverse mortgage?

We Answered:

Call the lender's servicing department and tell them your father died, give them your brother's name and address. If he's cashing the annuity checks, he's committing fraud. If you know about it and don't rat him out, you could be considered an accomplice. And you're getting screwed because the interest on the reverse mortgage is mounting every day, and fees are being incurred. Your brother is messing with your inheritance.

He has to do something because once the person with the reverse dies, the loan is due.

In fact, all mortgages work that way. When the guy with the mortgage is no longer around, the estate must pay off the mortgage somehow. This applies even when there are other owners who were not borrowers. They have the same options in any case, using whatever money is available, selling the house and paying the mortgage with the proceeds (additional proceeds would go to the heirs) or if someone wants to keep the house and has adequate income and credit they may be able to refinance it into their own mortgage.

Once the bank knows the mortgagor is deceased, they will give you some time to make whatever arrangments, but if nothing is done after a reasonable amount of time, they will start foreclosure. In other words, you may think you can trick us if you don't tell anyone what's happened, but we will find out eventually and you may regret not being honest. "You" in the generic sense, not specifically you the person asking this question. My concern for you is that you know what's happened and could find yourself in some hot water too.

If the lender is BofA, call 866-863-5224. They're in Seattle, open from 7am to 8pm Pacific time. You'd probably call that number for Countrywide too.

Mario Said:

Can having a reverse mortgage on your home hold you back from getting into a better nursing home?

We Answered:

no do not let that figure in your decision - -if you need the money now go for it -- you may die long before you need a nursing home!!!

Felix Said:

If your house is confiscated by the federal government for drugs in the home, and you have a reverse mortgage?

We Answered:

Your mother-in-law will be sued by the mortgage company for the amount of the loan. She'll be paying it off for the rest of her life even though she no longer has the house.

Her best bet would be to evict the two drug users. She'll have to go through the legal eviction process with the courts, but it could save her home.

Kathleen Said:

With a reverse mortgage how do they know if your still living in the home?

We Answered:

Usually if it's a long-term care facility (I would say more than 12 months qualifies as such) they have access to the person's income and assets and the mortgage company will be notified. Tell the scum that are considering trading in their mother for her home they should be ashamed of themselves - that's a pretty disgusting way to treat someone who can't defend themself. They're no better than the pathetic thugs that mug little old ladies and steal their purses.

Michelle Said:

Reverse mortgage value of the home--tax assessment or market value?

We Answered:

Only the actual value, they will appraise it.

Tax assessments are not based on current value, they are an equation that starts with sales price but is not based on value after that. Too many people lost their homes when the market raises for the government to do that anymore (they used to).

Tanya Said:

Does reverse mortgage give away your home?

We Answered:

It's not necessarily a Bad Deal, and the lender does not necessarily take the house.

Basically, in a reverse mortgage, your monthly payments are set to be lower than the amount needed to pay off the loan. As a result, the amount you owe either stays the same or actually goes up. (It will go up if your payments don't include the full amount of interest falling due.)

These programs are required to meet certain Federal standards and laws in order to help prevent fraud.

A reverse mortgage is useful for someone who needs a home but can't afford the high payments of the standard, fixed-rate, 20 or 30-year mortgage plans ("conventional mortgage"). When he sells the house, he will have to then pay off the FULL amount of the loan and he might not have any equity in the house--but usually, house values go up in the long run, so he might earn some equity that way.

There are special programs, regulated by Federal law, aimed at the elderly. Under these programs, the elderly can borrow against the equity in their house and not make ANY payments at all as long as they own the house. So the mortgage will consist of both the borrowed principal, and the unpaid interest on the amount borrowed. If the owner is elderly and on a small, fixed income, this can be a very helpful program, because it's a way for that person to have more income but not have higher expenses. If the house is sold, or if the owner dies and the heirs inherit the house, then the accumulated principal and the accumulated interest must be paid off then--but only then.

This particular kind of program, aimed at the elderly, is called the "Home Equity Conversion Mortgage" (HECM), and is sponsored by Fannie Mae. A list of approved lenders is availble by calling 1-800-7FANNIE.

It means the heirs inherit less. But so what? It allows the elderly owner to have a better life than a small fixed income would have allowed.

The Federal Deposit Insurance Corp. (FDIC) has an excellent article in its Summer, 2002 "Consumer News" about "High Cost Predatory Home Loans: How to Avoid the Traps" which may help you on your concerns. Go to: www.fdic.gov/consumers/consumer/news