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Reverse mortgage questions. #5195542 08/24/19 02:45 PM
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callbay Offline OP
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My neighbor lady has a reverse mortgage. She got $100,000 cash at the time she and her late husband took out the mortgage. I believe the mortgage company also paid off the old regular mortgage. She has never gotten monthly payments. Her monthly sheet from the mortgage company shows the $100,000 and an additional $59,000 that has built up from when the mortgage was take out about in about 13 years ago.

My question is will she owe the extra $59,000 if she decides to just move out and not sell the house because the house is not worth $159,000?

Will the reverse mortgage company try to go after her if she just abandons the house?

Will the mortgage company probably list the house for sale for less than the $159,000 if it will not apraise for that much.

Re: Reverse mortgage questions. [Re: callbay] #5195549 08/24/19 02:56 PM
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skyactiv Offline
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Please don't get involved with your neighbor in this matter.


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Re: Reverse mortgage questions. [Re: callbay] #5195566 08/24/19 03:12 PM
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You need to see the contract.


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Re: Reverse mortgage questions. [Re: callbay] #5195578 08/24/19 03:26 PM
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oldhp Offline
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Wells Fargo. Mom got a reverse loan. When she passed away they said she owed $143,000. 1 yr later they sold the house for $30,000. Wells Fargo belonged to Fannie Mae at the time. Who pays the difference??? The US taxpayer.


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Re: Reverse mortgage questions. [Re: JeffKeryk] #5195579 08/24/19 03:27 PM
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Mr Nice Offline
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Originally Posted by JeffKeryk
You need to see the contract.


Yep.

And a lawyer before she signed the contract.

Re: Reverse mortgage questions. [Re: oldhp] #5195584 08/24/19 03:33 PM
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CKN Online Content
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Originally Posted by oldhp
Wells Fargo. Mom got a reverse loan. When she passed away they said she owed $143,000. 1 yr later they sold the house for $30,000. Wells Fargo belonged to Fannie Mae at the time. Who pays the difference??? The US taxpayer.



No-There is a mandatory insurance policy that covers this situation with reverse mortgages. The policy is like $5,000.00 . It's easily the most expensive "line items" when you apply for a loan of this type.

Last edited by CKN; 08/24/19 03:35 PM.
Re: Reverse mortgage questions. [Re: callbay] #5195612 08/24/19 04:11 PM
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In simple terms, what is a reverse mortgage?


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Re: Reverse mortgage questions. [Re: 92saturnsl2] #5195641 08/24/19 04:51 PM
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Originally Posted by 92saturnsl2
In simple terms, what is a reverse mortgage?



Instead of paying a monthly mortgage payment in your retirement years you use your home's equality for a loan and finance company pays the homeowner. When the homeowners pass on the finance company takes ownership of the property.

This is the bare bones explanation.


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Re: Reverse mortgage questions. [Re: callbay] #5195653 08/24/19 05:25 PM
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Farnsworth Online Content
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They took the lump sum so don't get monthly payments. Most places the houses are worth more than the loans. The loans are insured and losses come from the insurance pool not the tax payer afaik. These things should be banned. They target seniors who are the most likely to not understand what they are signing. Wiki, the govt site and aarp all have lots to read about how these work.

Re: Reverse mortgage questions. [Re: CKN] #5195665 08/24/19 05:44 PM
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eljefino Offline
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Originally Posted by CKN
Originally Posted by oldhp
Wells Fargo. Mom got a reverse loan. When she passed away they said she owed $143,000. 1 yr later they sold the house for $30,000. Wells Fargo belonged to Fannie Mae at the time. Who pays the difference??? The US taxpayer.



No-There is a mandatory insurance policy that covers this situation with reverse mortgages. The policy is like $5,000.00 . It's easily the most expensive "line items" when you apply for a loan of this type.


And who re-insures these insurance companies? Or, rather, who did in 2009?

Re: Reverse mortgage questions. [Re: eljefino] #5195712 08/24/19 07:15 PM
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Insurance companies which were loaned money in 2009 paid the loans back with interest. Banks and a certain automaker on the other hand.


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Re: Reverse mortgage questions. [Re: Farnsworth] #5195951 08/25/19 06:00 AM
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alarmguy Offline
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Originally Posted by Farnsworth
They took the lump sum so don't get monthly payments. Most places the houses are worth more than the loans. The loans are insured and losses come from the insurance pool not the tax payer afaik. These things should be banned. ....


Why should they be banned?
People should be free to enter any type of agreement they would like with their personal possessions. Who is mommy government to tell me what to do with my property?

Reverse mortgages are not some evil thing and gives the option to some older people to live a better life and not worry about leaving their hard earned money to someone else after they die and can no longer use it..

Its a tool, like anything else in life, one can say mortgage loans are an evil thing too, [censored], the cost of your home loan doubles by the time you pay it off, or car loans, people end up upside down on their cal loan as soon as they drive off the lot, or any loan for that matter. Its part of being free to choose.

Large bank Such as Wells Fargo are reputable experts with these mortgages, I would stay away from third party lenders but that goes for any transaction.
People tend to trash what they do not understand, much like, when people started buying home with a mortgage. :o) See what I am getting at here?
A very long time ago in the USA, some people might ask, who the HECK would borrow money from a bank to buy a home because by the time they paid it off 15 to THIRTY years later the money they had to pay back increased over 100% !!!

Basics of a reverse mortgage- Click

Last edited by alarmguy; 08/25/19 06:23 AM.

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Re: Reverse mortgage questions. [Re: callbay] #5196650 08/25/19 09:07 PM
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CKN Online Content
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There is no reason for these loans to be banned. On any given situation when it comes to finances there are some ignorant people. It makes perfect sense to be able to "tap" your equity out of your house to maintain your standard of living-or help with capitol improvements on your house (a new roof for example) . I looked in to this-and I can tell you that what they approve you for is a very conservative amount compared to the actual value of your home.

Because of this-it's an extremely small chance that the home won't cover the cost of the loan when the borrower no longer occupies the house with the lien on it.

Quite obvious there are some commenting who haven't checked in to the whole process.

Last edited by CKN; 08/25/19 09:08 PM.
Re: Reverse mortgage questions. [Re: CKN] #5196667 08/25/19 09:27 PM
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JeffKeryk Offline
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Originally Posted by CKN
There is no reason for these loans to be banned. On any given situation when it comes to finances there are some ignorant people. It makes perfect sense to be able to "tap" your equity out of your house to maintain your standard of living-or help with capitol improvements on your house (a new roof for example) . I looked in to this-and I can tell you that what they approve you for is a very conservative amount compared to the actual value of your home.

Because of this-it's an extremely small chance that the home won't cover the cost of the loan when the borrower no longer occupies the house with the lien on it.

Quite obvious there are some commenting who haven't checked in to the whole process.

Mostly agree; the problem is predatory lending, uneducated borrowers, market fluctuations, elder abuse.
As always, the devil is in the details.


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Re: Reverse mortgage questions. [Re: JeffKeryk] #5196689 08/25/19 10:12 PM
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Originally Posted by JeffKeryk
Originally Posted by CKN
There is no reason for these loans to be banned. On any given situation when it comes to finances there are some ignorant people. It makes perfect sense to be able to "tap" your equity out of your house to maintain your standard of living-or help with capitol improvements on your house (a new roof for example) . I looked in to this-and I can tell you that what they approve you for is a very conservative amount compared to the actual value of your home.

Because of this-it's an extremely small chance that the home won't cover the cost of the loan when the borrower no longer occupies the house with the lien on it.

Quite obvious there are some commenting who haven't checked in to the whole process.

Mostly agree; the problem is predatory lending, uneducated borrowers, market fluctuations, elder abuse.
As always, the devil is in the details.


I covered that with my ignorant people comment. Due to the conservative amount they approve you for-IMHO "market fluctuation" is a non-issue-and again there is PRIVATE insurance to deal with this in an unlikely "upside-down" situation.

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