I was in foreclosure and got approved for a mortgage?

No way! That's impossible right?  But it's true!  I was drowning in debt, my medical bills were through the roof and my home was in the process of being foreclosed on.  I didn't even have to prove income or have them run my credit report!

 

This is a real life scenario of a 78 year old widow with a home mortgage of 198,000 that was currently in foreclosure.

 

Her financial planner suggested that she contact Skyline Financial Corp. who offered her a reverse mortgage.  Her home was worth 470,000 and we were able to approve her for a mortgage of 320,540.00.  She used this new mortgage to pay off the old mortgage, cover the closing costs of 3,000 and deposit $119,000 in her bank to cover medical bills and have plenty for future living expenses.

 

A recent Wall Street Journal article reported that high levels of credit card debt and mounting health care bills have contributed to bankruptcies among 55+ year old which are at an all time high.

 

A reverse mortgage allows a  borrower who is 62 years or older to draw a certain amount of equity out of their home.  They have the choice to take it as a lump sum or as a line of credit with monthly installments to them.  They do not have to make any monthly payments and they do not have to qualify with income or credit.  This loan is based only on the borrower's age and equity in the home.

 

This is a great way to help someone who is facing losing their home, who couldn't get a home equity line of credit because they couldn't afford to pay it back.  There are many people that are unaware this program even exists.  It's our job to educate and help people that are in a bad situation, and this program could help change their life.

 
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38 Comments on I was in foreclosure and got approved for a mortgage?

20 Most Recent Comments Displayed Show All

OCT
19
2010
Attended Rain Camp

I guess it's a good last resort, but I agree with Keith (#13), the whole system is corrupt.  It is designed to keep us forever in debt.
8:34am • #19
655,846 Points 9 Featured Posts Outside Blog Called Shot Master

I have not been close enough to the reverse mortgage market but its good to be aware of that option. Thanks
8:40am • #20
3 Featured Posts Outside Blog Attended Rain Camp

The fees are so high on this type of loan that I have a difficult time advising my clients to seek such a product. Have their been changes to the free structures on this type of loan?
8:54am • #21
466,655 Points 1 Featured Post

Hmmmm, interesting post for sure.   I gues like most things, it's knowledge, and talking to the right person who can steer you in the right direction is the thing to do!

Patricia/Seacoast NH
9:20am • #22
113,457 Points

Thank you for sharing this incredible story!
9:21am • #23
742,335 Points 16 Featured Posts Outside Blog Called Shot Master

Colleen, a great example of how a reverse mortgage can help some people. Thanks.
9:23am • #24
1,424,985 Points 56 Featured Posts Outside Blog Called Shot Master

The reverse mortgagae can be a great tool if used right.  The fine print is a must to read.  I have a reletiv ethat did this, and they ended up with 60% of the value and being able to live there as long as they were a live.  Then the bank got the house!   Even with the values going  done, the bank makes a nice profit.
9:38am • #25

Great post!  I hadn't thought about this creative use of a reverse mortgage. 
9:41am • #26
1 Featured Post Outside Blog Attended Rain Camp Called Shot Master

I had a client in their seventies in need of some relief if they were going to stay and keep their home.  Rather than selling and having to move in with family or rent, and the rent was going to be the same as their mortgage by the way;  they did a reverse mortgage and it has worked out great for them so far.  The only thing is one of their 50 something children said - Well, now we will not have any inheritance.  There will not be any money left.  Hmmmmmmm, go figure.
9:44am • #27
122,531 Points 2 Featured Posts Outside Blog Attended Rain Camp

I'll have to ditto the first comment to this blog, from Jeff.  I think there could be room for abuse in this program but it can also be a financial life line for someone in need. 
9:58am • #28

Colleen, Thanks for the education.   I don't know too much about reverse mortgages, except that I've always figured there was a "catch" to them, and I don't think there should be a "catch" to anything for the older folks in our country!  I wonder if there can be just some nice, honest, general help like good, not-too-pricey in fees & interest reverse mortgages for the older folks who are watching their medical bills go sky-high, and their social security and retirement funds drop and drop.   If this were truly a viable way to stay in your home and enjoy the golden years without added stress, then that gives people more reason to buy homes as an investment when they're younger.  This would be good info to even educate younger folks with maybe?  I dunno.  I definitely need to learn more about this.
10:17am • #29
306,212 Points 11 Featured Posts Called Shot Master

Colleen,

Thanks for sharing.  My neighbor next to my parents' house for 35 years lost her home not due to an actual foreclosure but because she co-signed on a loan for her son who then filed bankruptcy and the bank took her house.  Perhaps had she known about this program, she could've benefited from it as well.  Her house was paid off in full at that time and it was so sad to have seen her lose it.
10:37am • #30
233,368 Points 4 Featured Posts Outside Blog Attended Rain Camp

This is a great tool but not for everyone.  I know an elderly lady who got a reverse mortgage 7 years ago and the monthly money run out this year.  She can still live in the house as I understand it, but she can't sell it.  She is in her 80's.  I don't know who recommended this scenario, as I know there are different versions of reverse mortgages, but I know that this lady is living a nightmare.
11:07am • #31
569,544 Points 1 Featured Post Localism Sponsor Outside Blog

Hi Colleen,  Interesting post.  I wouldn't have thought of this strategy !  Well done !
12:25pm • #32

Good to know that there are still reverse mortgages and that they work for some people.
1:07pm • #33
374,131 Points 6 Featured Posts

Colleen: That's a great story. I don't do reverse mortgages here but pass those off to one of my colleagues. It is true. Reverse mortgages can be a house-saver! Thanks for the post!
1:17pm • #34
465,199 Points 2 Featured Posts Outside Blog

Did she pay cash for the house with the equity from her present home?
4:30pm • #35
SEP
03
2011
200,902 Points 2 Featured Posts Called Shot Master

WOW!!!! This is news to me, and can really be a lifesaver to older homeowners in financial difficulty. Thanks for sharing with us, I will certainly pass this along to others!
9:27pm • #36
403,571 Points 28 Featured Posts Outside Blog Called Shot Master

Colleen: It worked out for this lady who would have lost everthing. But my worry is for those who don't need a reverse mortgage YET. Since the mortgage is tied to an appraisal, and all appraisals are LOW in this market, they might be going into it at the wrong time. A client of mine did it at the height of the market and got a reverse loan of $850,000. If she did it now, it would only be about $450,000. See what I mean? Maybe the banks are winning one more time.
9:42pm • #37
201,526 Points 7 Featured Posts Attended Rain Camp Called Shot Master

Coleen, I agree with Hella, if a senior really does not need a reverse mortgage, this is the right step, if they don't and can wait for hyperinflation which will certainly be here before we all know it, that is the right thing to do.
10:14pm • #38

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Colleen Craig (Southern California Mortgage Professional) Rainmaker_large

Colleen Craig

Santa Clarita, CA

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Southern California Mortgage Professional

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