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Blake
Blake, Lawyer
Category: Real Estate Law
Satisfied Customers: 785
Experience:  Counsel at Warningstar Intelligence
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WHEN CAME A REVERSE MORTGAGE BE FORGIVEN? I am so distraught

Customer Question

WHEN CAME A REVERSE MORTGAGE BE FORGIVEN?
JA: What steps have been taken so far? Has any paperwork been prepared or filed?
Customer: I am so distraught and depression thinking that I might lose my home and will not have a place to live? tHE BILL HAS ACCRED TO 110,000 DOLLARS. I don't know what to do. Celink turned it over to Novad management consulting on Nov.13th. I really need some advise
JA: The Real Estate Lawyer will be able to walk you through that. Where is the home located?
Customer: Shreveport, Louisiana
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no , madam
Submitted: 1 month ago.
Category: Real Estate Law
Expert:  Blake replied 1 month ago.
Generally speaking, you do not need to worry about losing your home in a reverse-mortgage situation.

There will be no foreclosure and no need to repay the balance unless and until certain events happen.

R everse mortgages have significant disadvantages and become due and payable—and subject to foreclosure—when:

The borrower permanently moves out. (Even though the borrower might still own the property, once the borrower’s principal place of residence changes, the lender may call the loan. If the borrower moves out of the home and, for example, lets someone else live there, or rents it out, the lender can require repayment immediately.)
The borrower temporarily moves out because of a physical or mental illness, like to a nursing home, and is away for over 12 consecutive months.
The borrower sells the home or transfers title (ownership) of the property.
The borrower dies, and the property is not the principal residence of at least one surviving borrower. (A nonborrowing spouse might be able to stay in the property even after the borrower has died if specific criteria are met. Talk to a lawyer or HUD-approved housing counselor for more information.)
The borrower doesn’t meet contractual requirements of the mortgage, like staying current on property taxes, having homeowners’ insurance on the property, and maintaining the home in a reasonable condition. If the borrower doesn’t pay taxes and insurance on the property, the lender may advance the funds to the lender for those bills initially. If the borrower doesn’t repay the advanced amounts, the lender may call the loan due. (The lender may require a set-aside account if there’s a chance the homeowner won’t be able to keep up with the tax and insurance bills.)
Seniors have often found themselves facing a foreclosure after the lender calls the loan due because of mortgage violations like failing to give the lender proof of occupancy, failing to pay insurance premiums, or letting the home fall into disrepair.

Generally, if the lender calls the loan due, the borrower—or heirs if the borrower has died—must pay off the debt (or pay 95% of the current appraised value to the lender, whichever is less), deed the property to the lender, or sell the property (for the lesser of the loan balance or 95% of the appraised value). (FHA insurance covers the remaining balance). Otherwise, the lender will foreclose.

If non of those situations have happened in your case then you do not need to repay anything right now.

Most likely your estate will need to pay the balance after you pass away or move out of the home, but until then you will have no obligation to pay anything.

I sincerely wish you all the best with this.
Expert:  Blake replied 1 month ago.
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