Walking away from reverse mortgage

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

Ummm....

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

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.

>>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.

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.

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

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

James, Thanks for your reply

You're welcome, Guest!!! :-)

>> 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.

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.

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.

Thanks all for the help

We just learned that our elderly (mid 80's) parents were pressured into signing a reverse mortgage from someone who came to their home and basically wouldn't leave without a signature. The company is JB Nutter and we are trying to deal with them on a consumer complaint level -

My question - Has anyone ever heard of a reverse mortgage that never yielded a cent to the home owner? Ever? Our parents did not own the property completely free and clear, but they had approximately $150k in equity. They paid fees at closing and never received anything from JB Nutter. We do NOT want the home and our parents can not take care of any of the expenses for it.


Thank you in advance for any advice.

Hi BandMHelp,

If a person takes out a reverse mortgage, he will either receive a lump sum amount at the time of taking out the loan or will receive monthly payments. It's strange that your parents did not receive anything. This can be scam. So, get in touch with an attorney and check out if you can take any actions against them.