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Elaine Said:

I have a reverse mortgage question?

We Answered:

OK, first of all, I do reverse mortgages, and believe me...we do not get a "huge" commission on reverse mortgages. Quite the opposite actually. A reverse mortgage is not for everyone. And just like it sounds, the mortgage goes backwards not forwards. It's an EXCELLENT loan for the right person, and it is not for everyone. Instead of making a mortgage payment, the person has 3 options. One is to take out a 1 time lump sum, and make no payments other then taxes and insurance (the loan does a negative amortization). Another is to get a set amount every month, and another is just to refinance and get no cash. The only thing you pay is your taxes and insurance, and no matter which option you chose, the loan does a negative amortization (gets bigger). Reverse mortgage can be refinanced, paid off, there is an end to the loan if the principal balance is paid. The bank does NOT own the house if the person should parish, it is the estates responsibility to sell the home or pay the loan off. There is an income limitation, and age limitation, and reverse mortgages CANNOT BE DONE by a lender that is not HUD approved. If you know anything about HUD, they are on top of every loan that goes through to make sure that there is a true benefit to the borrower. If there is no benefit, the loan is rejected. HUD frequently comes in and audits every loan file done by a HUD approved lender. If they feel there is any fraud, abuse, neglegence, or anything out of line, there is an investigation done and the lender could be shut down. There could also be criminal prosecution depending on the violation.

If you are in the North or South Carolina area, you can e-mail me at work with more questions. Loans are typically lender specific, and different states have different guidelines. If you are not in the Carolinas, I can connect you with a PROFESSIONAL in your area that knows about reverse mortgages to answer your questions correctly. My work e-mail is - sulrich@firstdecisionmtg.com

I hope this helps.

Leslie Said:

is the origination fee negotiable on a reverse mortgage?

We Answered:

Yes, the origination fee is one of the few things with a reverse mortgage that is negotiable. Most of the other fees are out of the broker's control. Find a good lender who will work with you to meet your needs and I'm sure you can negotiate the origination fee a bit. Keep in mind that the origination fee is capped by federal regulation, so every lender basically quotes the same origination fee but if they really want your business, they'll work with you.