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We have used up our reverse mortage for personal reasons and need to move near our children.

Will our credit be ruined if we walk away?
Will we be obligated to pay anything back?
Do we have to sell the home rather than walk away?
Can they make us pay anything back?

jameshogg · Posted: Sun Apr 03, 2011 7:51 pm Post subject:

Hi Guest,

If you walkaway from the property, the lender will foreclose the property which will have a negative affect on your credit report. However, you won't be obligated to pay anything to the lender.

Thanks

gmakerley · Posted: Mon Apr 04, 2011 8:32 am Post subject:

Ummm....

I was going to say something here, but I'm befuddled.

raymond · Posted: Mon Apr 04, 2011 5:40 pm Post subject:

That only makes sense if you owe more on the Reverse Mortgage then the value of your house. If you're negative, and need to leave the house, notify your Lender and tell them you'd like to give them the deed in lieu of foreclosure.

You and/or your heirs aren't responsible for paying anything back. The Lender will file a claim against the FHA insurance policy (you've been paying the insurance premiums from the beginning) and recover their loss.

A tradeline doesn't exist on your Credit Report for your Reverse Mortgage, so your FICO score won't be impacted in that manner. But I'm not sure about the "public records" section of your credit report. You should ask your Lender how that works, when you discuss giving the house to them.

raymond · Posted: Mon Apr 04, 2011 5:48 pm Post subject:

>>I was going to say something here, but I'm befuddled.

I'm surprised you didn't think of running it by me, George. You know I know more about Reverse Mortgages then most other folks, and always give reasonable advice. I'd love it if you worked for me - you'd be a terrific Reverse Mortgage Loan Officer.

gmakerley · Posted: Tue Apr 05, 2011 11:27 am Post subject:

That's a wonderful thing for you to say Raymond. I appreciate the compliment. I didn't really have anything to run by you, because I pretty much drew a blank as soon as I began to respond. It was one of those "duhhhhhhh" moments - you may not have those, but they're pretty popular in the population.

Thanks again - if I ever get to Irvine, I'll drop by.

Guest

Question
We have a reverse mortgage on our primary residence. We can no longer
afford the insurances and taxes on it. We would like to move into our
2nd home which is smaller and cheeper to maintain. If we let our home
(which has the reverse mortgage on it) go back to the bank will there
be a problem with any liens on our 2nd home?

Thanks

jameshogg · Posted: Thu Apr 07, 2011 12:03 am Post subject:

Hi Guest,

You can surrender the property to the lender who will sell it off in order to recover as much dues as possible. I don't think the lender will come after your second home to place a lien on it.

Thanks

Posted: Thu Apr 07, 2011 7:50 am Post subject:

James, Thanks for your reply

jameshogg · Posted: Thu Apr 07, 2011 11:06 pm Post subject:

You're welcome, Guest!!! Smile

raymond · Posted: Tue Apr 12, 2011 7:07 am Post subject:

>> If we let our home (which has the reverse mortgage on it) go back to the bank will there be a problem with any liens on our 2nd home?

Why would you give it back to the Lender when you could sell it and keep the retained equity? After it's sold, your second home will be your primary residence and you could get a Reverse Mortgage on it. Taxes and Insurance wouldn't be as difficult if you only had one home to maintain.

Posted: Tue Apr 12, 2011 7:19 am Post subject: Reverse mortgage

Raymond
Thanks for the reply,

Becaue of the falling housing market, our home isn,t worth near what it was when we took out the reverse. We would't get enough to pay off
the reverse mortgage.
The 2nd home we own is a smaller less valued home and the property
taxes and insurance is much cheeper and we don,t have to have expensive
flood insurance either.

raymond · Posted: Tue Apr 12, 2011 8:12 am Post subject:

Then let the company that services your Reverse Mortgage know your intention, and ask if you can give them the Deed back in lieu of foreclosure. Ask them if it'll impact your Credit - specifically, will the "foreclosure" show up in the Public Records section of a Credit Report. That's the only negative aspect I can think of that you'd encounter. The liens on your second home won't be impacted.

Guest

Thanks all for the help

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Walking away from reverse mortgage

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