Reverse Mortgage to Avoid Foreclosure

by Rose Broyles

Like the rest of the nation, many seniors are struggling to make ends meet. Some of them were swept into the loan practices of unscrupulous lenders who may have convinced them to refinance into loans that they could not afford.  For many of those seniors on fixed income and with virtually no assets other than their home, this has put them in a situation where they are at risk of foreclosure.

Fortunately, for those seniors, a reverse mortgage can be their only lifeline to saving them from losing their home.

Requirements

• Requires no income or credit qualifications
• Youngest borrower has to be 62 years of age or older for HUD-government insured mortgage.
• Home must meet reverse mortage requirements. (check with a local lender to see what types are acceptable. Typically single family, condos, and even mobile homes are ok.)
• Property must be reasonably maintained
• The only credit requirement is that the borrower must not be in default with a government-backed loan – SBA, FHA or other federal obligation. However, if a notice of default has not been filed the borrower can still get a reverse mortgage loan.
• If a default notice is filed, the borrower would need to bring funds to cure the default before the reverse mortgage could proceed.
• The borrower must go through counseling, including appraisal, title issues regarding: conservatorships and trusts, etc.

If you have any questions about reverse mortgages, you can check HUD’s site for more information. You or your loved one can also check with their current house lender for reverse mortgage information.

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