Reverse Mortgage Counseling Gets a Makeover
HUD issued new rules that lenders and homeowners have to follow now. The strategy is to protect the homeowners and make sure they have the information that they need to know. There is some material the borrower has to read prior to counseling session. This material along with the loan comparison worksheets gives the borrower information to make an informed decision. I will provide this information to my clients so they understand what they should do. The counselor will make sure the borrower must answer correctly. The counselor has the authority to withhold issuing the certificate of counseling if these questions are not answered to the counselor’s satisfaction.
Author: Marty Appel-Bay Area Reverse Mortgage
Reverse Mortgage: What is it?
›Home Equity Conversion Mortgage
›Borrower can never owe more than value of home at time loan needs to be paid
›Geared to those who own & live in home
›62+, single family, primary residence
›Don’t have to own free & clear
›Willing to attend HECM counseling session
Funds can be used for:
›In Home Care
›Back Taxes
›Repairs
›Pay off Mortgage
›Pay off Credit Card
›Purchase Car
›Take a Trip
›Supplement Income
Myths:
›Myth: Bank winds up owning home
Can’t lose home. Goes to heirs.
›Myth: Bank gets all, heirs get nothing
Heirs receive balance of unused equity
›Myth: You could owe more than house is worth
Never. Non-recourse: lender can’t come after other assets
›Borrowing against home means you could lose it to foreclosure if you miss payments
There are NO payments
›At some point, borrower needs to pay back all they owe
Only events that trigger repayment: fixed maturity date, death of last surviving owner, sale of property, failure to pay taxes & insurance or absence of more than a year
