CAN I GET A REVERSE MORTGAGE IF I’M IN FORECLOSURE?
The short answer is…MAYBE. But before we go too deep into this topic a simple question needs to be answered.
CAN A REVERSE MORTGAGE SAVE A SENIOR’S HOME IF THEY ARE IN FORECLOSURE?
Yes it can. By the way, if you have a foreclosure sale date, or you have a time sensitive question(and need to bypass this article) you can reach us directly at (267) 289 1095. In addition, you can email email@example.com. Just put “EMERGENCY FORECLOSURE HELP” in the headline and you’ll make it to the top of my personal list.
Here’s how. When a senior is in foreclosure, they are behind on their mortgage or tax payments. Eventually, the bank(or tax bureau) will try to take your home in an effort to get repaid. That’s the whole reason why mortgages are “secured” to your deed…so the bank is guaranteed to be paid back.
Now, what reverse mortgages do is they’ll actually pay the entire foreclosure off. That means that WE write a check to the bank for the entire balance that YOU owe. Because the bank is now paid in full, they issue a “satisfaction”, and they can no longer come after your home.
SO WHAT’S NEXT?
Well, we’ve paid your foreclosure off, and now you owe the money to the reverse mortgage company(remember, a reverse mortgage isn’t free money). We don’t require you to make monthly mortgage payments. In fact, instead of giving it to us, we expect you to keep your money in your own piggy bank.
YOU’LL PROBABLY LIVE EASIER WHEN YOU SAVE YOUR MONEY AS OPPOSED TO PAYING A BANK EVERY MONTH
On top of paying off your mortgage, we’ll go another step further. We’ll actually set up a separate account to pay your property taxes and homeowners insurance for the remainder of your lifespan. Don’t worry though, that account will be funded by the reverse mortgage, NOT by your own piggy bank.
YOU WON’T HAVE TO PAY YOUR MORTGAGE, TAXES OR HOMEOWNERS INSURANCE FOR THE REST OF YOUR LIFE
Now that you know that it’s possible, please read on and I’ll do my best to give you the reverse mortgage foreclosure “guidelines”. My goal isn’t to make you a reverse mortgage “expert”, its really to help you understand whether you can use a reverse as a tool to save your home, or if you need to look into another resource.
FIRST SOME HISTORY…
Back before May of 2015, anybody in any situation could get a reverse mortgage. They’d just need to be 62 or older and have some equity. Income, credit and mortgage lates didn’t matter.
But then the good ol’ government cracked down. The crew down at the HUD and the FHA took a look at statistics, which showed that folks who had been late on their mortgage(or taxes) more than once were pretty likely to default on their property taxes in the future.
Knowing that tax defaults eventually lead to a foreclosure, we(the reverse mortgage industry) wanted to make sure that the folks who got reverse mortgages were protected from that sort of mess.
HERE’S WHAT WE DID(AND WHY IT ANSWERS YOUR QUESTION)
Now, any senior who has a history of mortgage lates, tax lates or is currently in foreclosure will have a couple of extra steps to their reverse mortgage.
First, we will require the reverse mortgage loan to pay off their mortgage(and anything else secured) on title. That will take care of the foreclosure.
Next, we will escrow their property taxes and homeowners insurance for their lifetime expectancy.
THIS WILL ENSURE THAT THE SENIOR WILL BE ABLE TO SUSTAIN THEMSELVES IN THEIR HOME FOREVER, AND WON’T EVER BE ABLE TO LOSE HIS OR HER HOME
Now, what’s the downside?
Quite honestly, fewer seniors in this situation will qualify. This is because the loan size will need to be big enough to both pay off the mortgage and fund the lifetime expectancy set aside.
HOW DO I FIGURE OUT IF I QUALIFY EVEN IF I’M IN FORECLOSURE?
Here are some guidelines. If you’re in your 60’s, you need to have at least 70% equity. For example, if your home is worth $300,000, you’ll need to owe less than $90,000 for this to work. By the way, this is more equity needed than a traditional reverse. Remember, we need enough room in the loan to set up an escrow account for your property taxes and homeowners insurance.
If you’re in your 70’s, you’ll need to have 60% equity. And when you get to your 80’s and beyond, you’ll need right around 40-50% equity to get a reverse mortgage that pays off your foreclosure.
These are just guidelines though. Your approval will depend on your age, how much you currently owe, and how much your annual taxes and other homeowners charges are.
The only way to truly know if you qualify is reach out(really, there are no lifetime expectancy set-aside calculators available to the public).
On our call, we’ll need to know the following…
✔ YOUR AGE
✔HOW MUCH IS OWED ON YOUR HOME(THE ENTIRE AMOUNT INCLUDING ATTORNEYS FEES ETC)
✔YOUR APPROXIMATE HOME VALUE
✔YOUR ANNUAL TAX AND HOMEOWNERS INSURANCE BILL
Then, we’ll calculate if you can qualify. If you can get a reverse mortgage, you will no longer need to pay your mortgage, property taxes or homeowners insurance. Your home will be saved, and you won’t have to worry about the bank(or the tax bureau) taking your home. The weight that you will feel lifted off your shoulders will be immeasurable.
On the other hand, if you CAN’T qualify(like I said, not everybody will qualify for this) we’ll let you know immediately. Then, we’ll go over other options that you might have besides the reverse mortgage.
For every single person we help, our goal for you is to save enough money so you can live financially comfortable in your home for the rest of your life.
Feel free to reach out to us at (267) 289 1095 or email firstname.lastname@example.org if you’d like to see if a reverse mortgage can pay off your foreclosure and save your home. Again, if emailing, please write “EMERGENCY FORECLOSURE HELP” in the headline and you’ll immediately go to the very top of my list.