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More and More Reverse Mortgages are rescuing people from Foreclosure

I have seen a huge spike in requests for Reverse Mortgages for borrowers who are in foreclosure.

In my opinion, the Reverse Mortgage is the absolute best outcome to the already bad situation because the borrower gets to stay in their home, they have no more issues with making payments and the lender gets paid off now (albeit a reduced amount in many cases.)

Many lenders are still not taking the proceeds of a Reverse Mortgage and this is something that should be addresses on a national legislative level. It just makes no sense that a lender will take a certain amount if the property is being sold and will not take the same amount if the borrower is using a Reverse Mortgage to stay in their home.

Posted by Michael Pinter on 07/07/2009 04:02 PM

Comments (6)

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6 Comments on More and More Reverse Mortgages are rescuing people from Foreclosure

JUL

I am wondering in the end if reverse mortgages are the next ticking time bomb . But for now you are right they are a great way to help folks

Charlie,

That's a great question, here's my opinion: The borrower is clear because it is a non-recourse loan. The lender is clear because they are insured against loss by HUD. The government should be clear because they are taking huge insurance premiums agianst the possibility of a loss. Obviously is they are not taking enough, there could be a sortfall, but I think if there are big claims, they won't come for a long time and by then, the govenment will have even more in premiums to cover them.

Thanks for the comment

Michael Pinter

I am a little confused..I thought you had to have equity in your home to get a reverse... and that seems to be the problem with most people they don't have the equity