Reverse Mort.

[Condor]

Anyone here done a reverse? I'm looking into it, and thought I'd ask.

[BoomerCPO]

On the surface it sounds good....but beware of the fine print and comditions! Checking with the Better Business Bureau and other sources is something you should do as well. Tread carefully....your Home is at stake!

 

Boomer.....who has never seen a Bank or Financial Institution do a darn thing for anyone unless there was something for them to gain from it.

[sgn]

Not from my Mom's point of view, she had a severe stroke day after Christmas and is missing all the "fun".

 

IF YOU DON'T TAKE CARE OF THINGS UP FRONT, Reverse mortage is a pain in the part of the human body that touches the motorcycle seat !!!

 

Was good for her as it provide a suppliment to her Social Security check.

 

BUT, now that she cannot take care of her own affairs - it is a real pain for me.

 

As I see it a reverse mortage is only good if your heirs have no dessire for your home. Reverse Mortage (RM) is a govt. backed loan. At the "end" they allow several options. 1. your heirs can repurchase the home for the amount of loan (your proceeds) 2. the home can be sold on the open market any amount over your proceeds goes to your heirs, any amount under and the "bank" eats the loss

3. The home can "sit" and go through foreclosure.

 

Now that doesn't sound to bad, but wait lets look at the real world using my Mom as our example.

 

She has a stroke, disabling her and putting her in a rehab/nursing home - she is now not living in the home - violates her terms of the RM - all of them state that it must be your principle residence. So her nice little check stops! This does NOT put the loan into foreclosure mode - just stops the proceeds. Because this is a loan insurance MUST be maintained on the home (in the contract). You say no big deal, ever try to insure a home that no one is living in? just ask your insurance agent they will tell you all about it as they are driving to the bank to deposit your insurance check.

 

No lets talk some more, because Mom did NOT die, and because I have no power of attorney nor conservatorship, I can not "deal" with the RM bank on her behalf.

Cannot be sold, she is still living. Cannot go into foreclosure, she is still living, I cannot "buy" it back she is still living.

 

So an okay home sits 250 miles away with full utilities (see insurance agent) and I make the drive one weekend a month and "live" in it so that is a "vacation" home and allows it to be insured.

 

Meanwhile back at the ranch, an attorney is making $2,500 to file in court papers for consevatorship, which will allow me to "deal" with the RM (but the way RM will not even tell me how much to buy the home back becasue it would violate our HIPPA laws).

 

IF YOU ARE GOING TO DO THIS - hire your own attorney to advise you, talk to your heirs, make sure if you have heirs, that provisions are made to allow them to deal with this.

 

It has all been a real nightmare - if you have something of value that would bring your assets above $18,000,(includes any social security check or retirement) you also might not qualify for Medicade - nursing home care in our area is about $7,000 each month.

 

So the short side is this if you have something your want your children to have give it to them NOW - see your attorney and so some estate planning - BEFORE you talk to another person about RM.

 

My cell number is in my profile if you want to talk.

 

Steve

[Condor]

 

So the short side is this if you have something your want your children to have give it to them NOW - see your attorney and so some estate planning - BEFORE you talk to another person about RM.

 

My cell number is in my profile if you want to talk.

 

Steve

 

WOW.... I can understand your mood.... But it also sounds like there were some things that should have been taken care of before things got to this point. There are a lot of different ways a reverse can be applied, and by law you have to attend an independant counceling service to obtain a certificate that you have been counceled before a lending institution can even start the reverse process. In our case we're looking at a line of credit, not monthly payments. Things have changed a lot since reverse mortages first came on the market. Maybe a renogtiation of the reverse might be an option in your case??

[camos]

In this country at least, a line of credit and a mortgage or reverse mortgage are very different things. I recently got a significant line of credit to do some renovations on my house. The bank holding the mortgage on the house will give a line of credit up to about half of the current net value of the house. My house was almost paid off and to get this line of credit get a line of credit that was enough to do the reno and pay off the mortgage. Unlike a regular mortgage, the only payment required is the monthly interest be paid as it accrues. No payment on the principle is necessary although in the long term reducing the principle is a good idea. Any amount paid over the amount of interest is applied to the principle. It's a pretty sweet deal.

 

Don't know much about reverse mortgages but the situation sqn finds himself in is certainly a serious pitfall that can happen if not enough research is done prior to getting into one. Good luck with getting your situation sorted out Steve.

[Condor]

In this country at least, a line of credit and a mortgage or reverse mortgage are very different things. Steve.

 

 

actually a line of credit is one of the options offered with a reverse,,,,

[Sailor]

My mother in law got talked into a reverse mortgage. Not good. You lose the equity in your house. You are better off to sell it and keep the cash. When she had a heart attack the bank wanted full payment in 60 days or they foreclose! The interest fees do add up. That gives you next to no time to take care of the legal end and put it on the market. You can bet their fees would have eaten up anything that was left. You can get a loan against the equity in your house.

[sgn]

Wasn't slamming the RM as much as it was to point out the need to make sure you have a complete picture of what you desire to do about your estate.

 

Mom, did take the required counciling time and also made it a point to have my brother and I attend with her.

 

Where she made her mistake was in not doing her "homework", the required time paints a very accurate "picture" of the reverse mortage but does not stress the importance of doing before hand the things to have your wishes carried out by your loved ones IF you get unable to conduct your own affairs.

 

So while my post does slam the RM (for me it is not a good choice) my real reason for the response was to encourage you to take a few moments with your attorney and do some "what if" planning.

 

Like I said the additional money each month for Mom was a real blessing for her, the hassle of dealing with "half a plan" is my real problem, the RM counciling does not go into the "what if" situation enough.

 

Just the thoughts from a guy caught in the middle.

 

Steve

[Condor]

 

Just the thoughts from a guy caught in the middle.

 

Steve

 

Your situation is going to be #1 on my list of questions Steve. I'll bet that power of attorney in your case would have helped out a bunch....