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Reverse Mortgage #4975862
01/11/19 09:10 AM
01/11/19 09:10 AM
Joined: May 2018
Posts: 1,677
Tri State Conservative
Zee09 Offline OP
Zee09  Offline OP
Joined: May 2018
Posts: 1,677
Tri State Conservative
Seen a whole bunch of adverts this morning
Just a question ( not about me or anybody I know and of course not really a sound thing but...…….)

Is there a law against more than one property put into a RM plan?
Like the guy who has several houses etc. in the same state or other states and even countries.
I realize you could sell said properties and put the money in high interest funds etc. But that's not the question.
For conversation only. Just wondering how tightly regulated these are.


"If I walked on water, they'd say I couldn't swim."
Re: Reverse Mortgage [Re: Zee09] #4975871
01/11/19 09:20 AM
01/11/19 09:20 AM
Joined: Jul 2013
Posts: 2,332
Outer Banks, NC
NormanBuntz Offline
NormanBuntz  Offline
Joined: Jul 2013
Posts: 2,332
Outer Banks, NC
I believe the rules allow a RM only for a primary residence for an owner 65 or older.


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Re: Reverse Mortgage [Re: NormanBuntz] #4975896
01/11/19 10:02 AM
01/11/19 10:02 AM
Joined: Apr 2005
Posts: 644
NE Ohio
knerml Offline
knerml  Offline
Joined: Apr 2005
Posts: 644
NE Ohio
Originally Posted by NormanBuntz
I believe the rules allow a RM only for a primary residence for an owner 65 or older.

Agree. You need to be occupying the house. If you move out of the house for any reason without paying off the mortgage, say you go into a nursing home, they can foreclose.


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Re: Reverse Mortgage [Re: Zee09] #4975899
01/11/19 10:05 AM
01/11/19 10:05 AM
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
BMWTurboDzl Offline
BMWTurboDzl  Offline
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
One of the problems with what you're talking about is that states/countries have different laws regarding foreclosures. For example there are states which have judicial or non-judicial foreclosures. That causes problems for a lender if one property is located in a state with judicial foreclosure and the other property is not.

A RM is only as sound as the appraisal on which it is based. For example FHA recently reported that they have a group of RM's with inflated appraised values and IIRC these RM's were limited to a handful of appraisers.

RM's are a good idea for some people (ex, over 70 and own an expensive home free and clear).

Last edited by BMWTurboDzl; 01/11/19 10:05 AM.

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Re: Reverse Mortgage [Re: knerml] #4975903
01/11/19 10:08 AM
01/11/19 10:08 AM
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
BMWTurboDzl Offline
BMWTurboDzl  Offline
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
Originally Posted by knerml
Originally Posted by NormanBuntz
I believe the rules allow a RM only for a primary residence for an owner 65 or older.

Agree. You need to be occupying the house. If you move out of the house for any reason without paying off the mortgage, say you go into a nursing home, they can foreclose.


I don't know why that should matter. I can't see lenders doing an occupancy check.


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Re: Reverse Mortgage [Re: BMWTurboDzl] #4975911
01/11/19 10:19 AM
01/11/19 10:19 AM
Joined: Apr 2012
Posts: 5,774
MA
Wolf359 Online content
Wolf359  Online Content
Joined: Apr 2012
Posts: 5,774
MA
Originally Posted by BMWTurboDzl
Originally Posted by knerml
Originally Posted by NormanBuntz
I believe the rules allow a RM only for a primary residence for an owner 65 or older.

Agree. You need to be occupying the house. If you move out of the house for any reason without paying off the mortgage, say you go into a nursing home, they can foreclose.


I don't know why that should matter. I can't see lenders doing an occupancy check.


They don't, but when you move out, things tend to change like driver's license, type of insurance, where things get mailed etc. They can figure it out without doing a drive by.

It only works in a very limited case. The gamble is that you're going to live longer than they think so you'll get more out of it. They're betting you're going to die sooner or move out.

Re: Reverse Mortgage [Re: Zee09] #4975917
01/11/19 10:24 AM
01/11/19 10:24 AM
Joined: Jan 2017
Posts: 2,207
VW Fanboy Island
maxdustington Offline
maxdustington  Offline
Joined: Jan 2017
Posts: 2,207
VW Fanboy Island
It's a scam to foreclose. That's why they target people at the end of their life who possibly have reduced mental capabilities or are one injury away from assisted living. Fixed income desperation is the key motivator.


03 Jetta AWP/09A 205k kms
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Re: Reverse Mortgage [Re: BMWTurboDzl] #4975942
01/11/19 10:46 AM
01/11/19 10:46 AM
Joined: Nov 2012
Posts: 479
Ajax,Ontario, Canada
Pelican Offline
Pelican  Offline
Joined: Nov 2012
Posts: 479
Ajax,Ontario, Canada
Originally Posted by BMWTurboDzl
One of the problems with what you're talking about is that states/countries have different laws regarding foreclosures. For example there are states which have judicial or non-judicial foreclosures. That causes problems for a lender if one property is located in a state with judicial foreclosure and the other property is not.

A RM is only as sound as the appraisal on which it is based. For example FHA recently reported that they have a group of RM's with inflated appraised values and IIRC these RM's were limited to a handful of appraisers.

RM's are a good idea for some people (ex, over 70 and own an expensive home free and clear).


RM are not a good financial investment for the owner, period! It's very good for the lending party though. One must have a very good reason for a RM vs an outright sale, this is mainly an affective reason and mostly related to people in the 80s without heirs and who do not need assistance.

Re: Reverse Mortgage [Re: Zee09] #4975953
01/11/19 10:54 AM
01/11/19 10:54 AM
Joined: Jan 2013
Posts: 2,273
Texas
WyrTwister Offline
WyrTwister  Offline
Joined: Jan 2013
Posts: 2,273
Texas
So , if you move out & go into assisted living or a nursing home , you forfit the house ?


Wyr
God bless
Re: Reverse Mortgage [Re: Pelican] #4975954
01/11/19 10:56 AM
01/11/19 10:56 AM
Joined: May 2018
Posts: 1,677
Tri State Conservative
Zee09 Offline OP
Zee09  Offline OP
Joined: May 2018
Posts: 1,677
Tri State Conservative
I agree. It goes against my moral fiber.
I'm not in that age range but I most likely would be a good candidate.
I really have no heirs, a few I could have already stuck me with mortgages they never paid and I would
have a large paid for house in a good area to live in and use the money as living $$$
In the end a big old house can't do nothing for a dead man and the losers around me would just you know smile

I personally don't like the concept and who it targets though.


"If I walked on water, they'd say I couldn't swim."
Re: Reverse Mortgage [Re: WyrTwister] #4975957
01/11/19 10:58 AM
01/11/19 10:58 AM
Joined: May 2018
Posts: 1,677
Tri State Conservative
Zee09 Offline OP
Zee09  Offline OP
Joined: May 2018
Posts: 1,677
Tri State Conservative
Originally Posted by WyrTwister
So , if you move out & go into assisted living or a nursing home , you forfit the house ?


That would be a long stretch. You could put it on the market etc.
in the end the nursing home would get it anyway.


"If I walked on water, they'd say I couldn't swim."
Re: Reverse Mortgage [Re: Zee09] #4976006
01/11/19 11:35 AM
01/11/19 11:35 AM
Joined: Oct 2007
Posts: 407
Ga
DB_Cooper Offline
DB_Cooper  Offline
Joined: Oct 2007
Posts: 407
Ga
Just a note concerning my Mother's condo and her RM when she passed away. I was the executor for the estate and when she passed the RM lender is not "foreclosing" as it were. It is a binding contract lien recorded with the deed. What if fact happens is there is a sort of annuity that is being paid on the presumptive value of the property. I say a sort of annuity at if the RM recipient lives to be 150 years old..the RM may pay out that long. However the actuaries at the RM companies are very good. They know, more or less, what the life expectancy is of the RM recipient vs. the value of the property. The RM loans are also "guaranteed" by Uncle Sam (the taxpayers) too. The banks/lenders have no real risk as long as the original appraisal is sound. The government had to guarantee these loans to create the RM marketplace for seniors to begin with. This sound familiar? It should.

There is a "trigger" when the recipient dies the payments end and the "estate' can surrender the property to the RM lender or buy the property from the RM company for the payments made plus interest and fees.

What was shocking to me was the surprise fees, interest + monthly fee, commissions and expenses that were loaded into the RM note..literately many thousands of dollars that I could not get the RM lender (Bank of America) to explain. No amount of phone calls or letters generated any kind of reply. The bank costs ballooned the buyout too high to justify the estate buying the note back. Add in the overall opinion of the family was to let the condo go as it may be too hard for one of us to live there.

So BoA sells the condo via a local real estate agent. After listing the condo for an unreasonably high amount. And the estate only has so much time to liquidate assets..the property sold to the highest offer for about two thirds of that original RM buy out amount from BoA. So Uncle Sam must have paid out the difference!

My advise is be VERY CAREFUL with a RM. Some cases may be justified but, as we know, banks love their fees, particularly hidden fees. Add in the "no risk" Federal guarantee feature of the RM now you know why you see those advertisements on TV all on the time. Just be careful.






Last edited by DB_Cooper; 01/11/19 11:37 AM.
Re: Reverse Mortgage [Re: Wolf359] #4976021
01/11/19 11:42 AM
01/11/19 11:42 AM
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
BMWTurboDzl Offline
BMWTurboDzl  Offline
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
Originally Posted by Wolf359
Originally Posted by BMWTurboDzl
Originally Posted by knerml
Originally Posted by NormanBuntz
I believe the rules allow a RM only for a primary residence for an owner 65 or older.

Agree. You need to be occupying the house. If you move out of the house for any reason without paying off the mortgage, say you go into a nursing home, they can foreclose.


I don't know why that should matter. I can't see lenders doing an occupancy check.


They don't, but when you move out, things tend to change like driver's license, type of insurance, where things get mailed etc. They can figure it out without doing a drive by.

It only works in a very limited case. The gamble is that you're going to live longer than they think so you'll get more out of it. They're betting you're going to die sooner or move out.


Having 20 yrs in the industry I know for a fact that borrowers are NOT held to occupancy status on a mortgage loan. They're just not because lenders know that the living situation of an individual can/does change and it's generally very difficult as well as very expensive to prove intent in a court room.

Last edited by BMWTurboDzl; 01/11/19 11:42 AM.

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Re: Reverse Mortgage [Re: Pelican] #4976028
01/11/19 11:47 AM
01/11/19 11:47 AM
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
BMWTurboDzl Offline
BMWTurboDzl  Offline
Joined: Apr 2010
Posts: 2,505
Atlanta,GA
Originally Posted by Pelican
Originally Posted by BMWTurboDzl
One of the problems with what you're talking about is that states/countries have different laws regarding foreclosures. For example there are states which have judicial or non-judicial foreclosures. That causes problems for a lender if one property is located in a state with judicial foreclosure and the other property is not.

A RM is only as sound as the appraisal on which it is based. For example FHA recently reported that they have a group of RM's with inflated appraised values and IIRC these RM's were limited to a handful of appraisers.

RM's are a good idea for some people (ex, over 70 and own an expensive home free and clear).


RM are not a good financial investment for the owner, period! It's very good for the lending party though. One must have a very good reason for a RM vs an outright sale, this is mainly an affective reason and mostly related to people in the 80s without heirs and who do not need assistance.


By definition a RM is not an investment so there's no reason to view them through that lens. . Screw the heirs it's not their asset to begin with.


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Re: Reverse Mortgage [Re: BMWTurboDzl] #4976045
01/11/19 12:01 PM
01/11/19 12:01 PM
Joined: Apr 2012
Posts: 5,774
MA
Wolf359 Online content
Wolf359  Online Content
Joined: Apr 2012
Posts: 5,774
MA
Originally Posted by BMWTurboDzl
Having 20 yrs in the industry I know for a fact that borrowers are NOT held to occupancy status on a mortgage loan. They're just not because lenders know that the living situation of an individual can/does change and it's generally very difficult as well as very expensive to prove intent in a court room.



Are you talking about regular mortgages or reverse mortgages? I believe on a reverse mortgage, the owner is supposed to occupy the home. On a regular mortgage, the owner is supposed it live in the home for a year, but that is rarely enforced. There are very few people who take out reverse mortgages and of the ones I've heard of, you had to live in the house. Not sure how tough they are about enforcing that.

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