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What happens if my 92 yr old dad walks away from his reverse mortgage?

by mhaynie18 from Woodway, Texas. 22 days ago Reply


Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,791 contributions

There is lots of confusion on Reverse mortgages. Just like any loan, foreclosure would occur. But as long as taxes and insurance are being paid on the loan, they can't remove Dad, so why would you walk away? Also, regardless of what is owned, the maximum the lender can collect it 95% of the current appraised value. So even selling a home is a better option than walking away.

22 days ago
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Richard Woodward (RichardWoodward)
#42 ranked lender in Texas - 106 contributions

First of all, it depends on the type of reverse mortgage your father has. The best thing to do is call the mortgage servicer and ask the specific question. Secondly, why would he do that? Does he need to move? Once you determine the loan balance, contact a local Realtor to get an idea of the homes value. He may still have sufficient equity to pocket any remaining equity. I would be happy to address any specific questions you may have.

22 days ago
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,455 contributions

More info needed, but in general.. and assuming he has an FHA insured HECM (reverse mortgage).. then having this type of a reverse mortgage give's him many more options than a regular mortgage.. Consult a local real estate pro.. if there's equity in the home, then sell it.. he get's to keep the equity.. if there is no equity, then the reverse mortgage allows him to walk away without recourse to him or his estate...Obviously, there's much more info needed to address your scenario specifically, so i'd advise you to consult a local attorney or mortgage pro.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

17 days ago
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