Not fulfilling the borrower obligations under any mortgage or home equity loan, including any type of reverse mortgage, may lead to serious consequences—even foreclosure. That is why reverse mortgage borrowers are required to take part in pre-loan counseling (which details the loan’s commitments and conditions) before being approved for a reverse mortgage loan.
As with any mortgage—forward or reverse—you must meet your borrower obligations throughout the life of the loan, including but not limited to: keeping current with property taxes, insurance, and maintenance of the property. In addition, the property must be the borrower’s primary residence throughout duration of the reverse mortgage loan. If any of these obligations are not met, the loan will become due and payable.
A foreclosure is often the natural resolution of a reverse mortgage after the borrower passes away. When the last surviving borrower passes away or there is no next of kin to handle a sale, the estate will simply allow the home to go into foreclosure, with no penalty to the estate.
At Reverse Mortgage Funding LLC (RMF), our ultimate goal is to help older Americans experience the retirement lifestyle they deserve.
RMF President David Peskin not only explains how today’s reverse mortgages work, but also discusses what makes RMF one of the top reverse mortgage lenders in the nation.