Reverse mortgage

[Matthew Holman]

What is a reverse mortgage?

[Jeff B.]

Let's be more complete on the subject.

The OBJECTIVE is to keep seniors in their homes as long as they live in it.

• there's an appraisal to determine present equity
• that equity is then made available to the home owner(HO) in multiple ways;
• HELOC style account which the HO can draw upon at will
• monthly payments to the HO
• all cash lump sum distribution

All existing mortgages are paid off at COE, so the HO never pays out for a mortgage.

Property Taxes & Insurance are still the responsibility to be paid by the HO.

and there's an annual certification that at least one person is still resident.

There are no changes when the fist mate demises, but upon the demise of the second, the Reverse Mortgage is due and payable AND, due to accumulate yet unpaid interest, the payoff can easily be greater than the face value of the initial Reverse Loan.

If the last mate is relocated into a retirement 24/7 care facility, this triggers the end of the RM and the note is due per the above.

Some times the family would like to claim the home, and if they can pay the payoff value, they can do so.  However, It is very likely that they will not be able to do so.

So, while a foreclosure is likely, it is not a foregone conclusion.