How Does a Reverse Mortage get foreclosed on?

A few weeks back a long time client and friend of mine asked me how a property that has a Reverse Mortgage on it,  was going to be foreclosed on. The reson he asked me this question was because he had heard it was going to foreclosure and he may have an interest in buying it once the mortgage company owned it

This is something I had not thought about before or been asked, so I searched on the Internet for the answer, this is what I found out.

A Reverse Mortgage becomes due and payable when one of the following happens.

1.  The borrower sells the home.

2.  The borrower moves

3.  The borrower dies.

4.  The borrower does not pay the Taxes and Insurance

5.  The property is in disrepair and the borrower cannot make repairs.

6.  If the borrower moved out and rented the home.

If the borrower cannot correct any of these items, payments to the borrower would stop and between 1 month and 3 months the lender will start foreclosure.

If you have any questions regarding Real Estate I am always available to answer any questions you may have. Feel free in contacting me if you are thinking of buying or selling in the Montrose Area.

Alan Brown.. 970-209-8436  Cell     alanbrownrealtor@gmail.com  


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3 Comments on How Does a Reverse Mortgage get Foreclosed On?

OCT
06
2011
625,592 Points 1 Featured Post Outside Blog

Alan-great research, it's something I haven't thought about either. thanks for providing the items that would trigger the foreclosure process.

 

Best
4:39pm • #1
103,291 Points 1 Featured Post Called Shot Master

Alan, I would think the lender has other remedies as well, such as suspending payments and using those funds to pay the taxes, insurance, and repairs. I guess it is up to the lender in cases where the borrower still occupies the home. Good information. Suggested for feature.


Melville Capps
5:03pm • #2
222,146 Points Outside Blog Hit Router

Melville. Yes the lender can use funds to pay the taxes and insurance and add it to the loan. I think the issue there is when the loan is up to the amount that the borrower was able to borrow and there is no more room to add it to the principal amount. I would think the lender would still pay the taxes and insurance while they are foreclosing to cver themselves. I spoke to an Area Manger from one of the major lenders in the nation just last week about this problem, he said their company alone had as many as 300,000 reverse mortgage loans that the borrower has not been paying the taxes and insurance but the company was reluctant to foreclose on these people because they are older than 62 and it just would not look good in the media if Grandma was being foreclosed on.
5:31pm • #3


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Alan Brown

Montrose, CO

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Coldwell Banker Montrose Colorado

Address: 2023 S Townsend Ave, Montrose, CO, 81401

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