HOW TO GET OUT OF FORECLOSURE BY USING A REVERSE MORTGAGE
There’s a little known secret that debt relief attorneys are using to help senior citizens get out of foreclosure.. In this article we will dive deep into how reverse mortgages eliminate delinquent debt(and really all sorts of debt), who is eligible to pay off a foreclosure using a reverse mortgage, and the process we go through when we help folks.
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 (888) 309 9705 or (267) 289 1095. In addition, you can email firstname.lastname@example.org. Just put “EMERGENCY FORECLOSURE HELP” in the headline and you’ll make it to the top of my personal list.
Now, here’s how a reverse mortgage pays off delinquent debts. 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. This makes sense, right?
Now, reverse mortgages will actually pay off the entire debt that’s secured to your home. This is true whether you’re in foreclosure, just late on your mortgage, or current. When you close the reverse mortgage WE actually 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. This is the 10,000 foot view of how to get out of foreclosure(well at least how seniors can get out of foreclosure).
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(although you can if you want). In fact, instead of giving it to us, most seniors feel like their money works better when it’s in their 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(called a Reverse Mortgage LESA) 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.
Here’s how that works. Let’s say you’re 76 and have property charges(property taxes and homeowners insurance) of $7,000 a year. Your average calculated life expectancy is 87(based on HUD’s projections). We’ll hold 11 years of property taxes and homeowners insurance in a side escrow account called a LESA. Every time you have a property charge due, the reverse mortgage lender will make a payment out of that fund. It’s important to note that you aren’t charged any interest in the LESA until the funds are actually provided for your property charges.
Imagine never having to pay your property taxes or homeowners insurance. How much further would your money go?
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. I personally helped a little over 100 seniors use a Reverse Mortgage to get out from under foreclosure.
But then the good ol’ government did what they do “best” and stepped in. 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. In other words, we only want seniors to get reverse mortgages if they can afford to stay in their homes(with the reverse mortgage’s help of course).
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, as always 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 set up a “Reverse Mortgage LESA”, which will escrow your property taxes and homeowners insurance for your entire 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 of this change?
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 mortgage. Remember, we need enough room in the loan to both pay off the mortgage AND set up the reverse mortgage LESA 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.
***Just a note; if you live in California, or another state with low annual property taxes you’ll be able to get this done easier.
The only way to truly know if you qualify is reach out(unfortunately, 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 example, we work hand in hand with debt relief attorneys who can often assist.
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 toll free at (888) 309 9705, (267) 289 1095 or email email@example.com 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
WHAT SHOULD I DO NEXT TO GET MORE INFORMATION?
In this article, I attempted to be as thorough as possible, while at the same time I don’t know your exact situation(wouldn’t it be strange if I did). If you’d like to get more information about how a Reverse Mortgage can help you, a loved one or a client get out from under foreclosure, or you have any questions you can reach us at (888) 309 9705 or firstname.lastname@example.org.
I’ll personally do my best to answer your questions and help you understand how to get out of foreclosure by using a reverse mortgage. Thanks for reading…