Posted on: 21st Apr, 2010 05:03 pm
I am in the midst of trying to help my father get out of a tricky situation.
He has a HELOC on his property and owes roughly 80k to the bank - he needs to eliminate this debt or he will get foreclosed on. The initial court papers were filed about 2 months ago (this is in upstate NY).
He literally turned 62 the exact same week the foreclosure papers were filed.
Of course HUD just (last October) lowered the amount of money available to seniors through reverse mortgage by 10 percent, and his appraisal came in much lower than expected (122k)
This leaves him about 54k to offer the bank on a total debt of 80k
The lender says HUD will not approve of the reverse unless the debt is retired in full
The bank says no to a 54k short sale
My father gets SSI disability and could easily afford the payments on the (reduced) principal if HUD would allow the current lien holder (bank) to subordinate the remaining 26k behind the reverse - but HUD says no way
When I first heard HUD was lowering the total amounts available through a reverse mortgage...I read some rumblings about possible changes in the law that would allow seniors to subordinate behind a reverse...
Is there any truth to that, has anyone heard anything concrete about legislation actually in the works?
Any other ideas would be appreciated
Thanks
He has a HELOC on his property and owes roughly 80k to the bank - he needs to eliminate this debt or he will get foreclosed on. The initial court papers were filed about 2 months ago (this is in upstate NY).
He literally turned 62 the exact same week the foreclosure papers were filed.
Of course HUD just (last October) lowered the amount of money available to seniors through reverse mortgage by 10 percent, and his appraisal came in much lower than expected (122k)
This leaves him about 54k to offer the bank on a total debt of 80k
The lender says HUD will not approve of the reverse unless the debt is retired in full
The bank says no to a 54k short sale
My father gets SSI disability and could easily afford the payments on the (reduced) principal if HUD would allow the current lien holder (bank) to subordinate the remaining 26k behind the reverse - but HUD says no way
When I first heard HUD was lowering the total amounts available through a reverse mortgage...I read some rumblings about possible changes in the law that would allow seniors to subordinate behind a reverse...
Is there any truth to that, has anyone heard anything concrete about legislation actually in the works?
Any other ideas would be appreciated
Thanks
Welcome Guest,
Not all liens will be subordinated in case of a reverse mortgage. As far as I know, State and Local Court Judgments and Judgment Liens and Federal Judgments and Debts are allowable subordinate liens at HECM origination. In this case, as your father has a HELOC, unless he pays it off, the HUD will not be ready to give you a loan.
Not all liens will be subordinated in case of a reverse mortgage. As far as I know, State and Local Court Judgments and Judgment Liens and Federal Judgments and Debts are allowable subordinate liens at HECM origination. In this case, as your father has a HELOC, unless he pays it off, the HUD will not be ready to give you a loan.