CALL US: 703-319-2198

Home Equity at Risk!

During the brunt of the recent mortgage crisis, when lenders nationwide faced unprecedented levels of mortgage loan delinquency in short periods of time, it was common to see delinquent mortgages sit with no adverse lender action.  The lenders did not have the time to focus on accelerating these loans and often let them sit with the equity cushion to protect their interest.

Today, however, the lending environment has changed again.  No longer will a lender allow a loan to pass the 120 day default mark and do nothing.  Lenders are aggressively accelerating these loans and pushing them through the foreclosure process.  This is even the case with people in default that have significant home equity.  If your lender is owed only 20% of the home value, as was recently the case with a 68 year old client of ours, all of your home equity is at risk and you shouldn’t assume otherwise. We should all be aware that you can lose it all with no legal recourse.

I bring this up because I believe it is important to be aware of the rights of lenders to protect their interests.  For a bank or a lender it is all about money and there is no emotion.  If you or someone you know is in this position you should immediately open up a dialog with the lender.  Be proactive and do whatever you need to do to keep your loan from being accelerated into foreclosure.

Alternatively, if you are older and retired and in this precarious position you can also utilize a Reverse Mortgage to buy out the delinquent or defaulted mortgage to protect your home equity and avoid further risk.  If you are not eligible for a Reverse Mortgage then it is in your best interest to communicate with your lender immediately and/or contact a realtor to sell your property before the lender legally moves to protect their interest and wipes out your hard earned home equity.

A Reverse Mortgage, a loan modification, or an outright property sale are all options to protect your home equity in the face of financial difficulties.

George H. Omilan


NMLS# 873983

Questions/Comments encouraged


Recent Posts

Blog Tags

Reverse Mortgage Retirement Planning Annuity Traditional Mortgage Fiscal Cliff Medicare Short Sales Debt Mitigation supplemental retirement income Reverse to Purchase Mortgage Retirement income insecurity forgiven mortgage debt mortgage debt forgiveness act solutions for underwater properties home equity access HECM Reverse Mortgage Government insured mortgage lifetime income with a Reverse Loan modification modify your loan with your lender Home Care foreclosure Mortgage Loan Process FHA HUD Construction Loan Hard Money Loan mortgage debt relief act FINRA HECM to Purchase HECM for Purchase Long Term Care Rentership Real Estate Economy Financial Assessments Mortgage Deliquency Seniors Social Security Sandwich Generation Financial Planning private label reverse mortgage growth factor reverse credit line LESA Retirement security assisted living Eligibility for Reverse Mortgage Estate Plan Age in Place downsizing Trump Treasury occupancy requirements Senior Advocate mortgage debt Senior Care Gray Divorce Jumbo Reverse Mortgage Principal Limit Factor Non-recourse loan investor financing No Doc Investor Loans Specialized Forward Mortgages Jefferson Mortgage Group Non QM bankruptcy QM Commercial Real Estate Investor Loans Real Estate Investment Loans self-employed borrower bank statement loan Jumbo Mortgage Loan MIP HECM Changes mortgage Asset Qualifer Asset Based Mortgage VA Low Score VA LOAN manual underwrite Unrestricted Approval success story 2021 Changes Inflation cashflow Blanket Loan Reverse Mortgage Eligibility 55+ Fed Interest Rates Housing Market Housing Prices Mortgage Rates Real Estate Market Diversification Prequalification 2023 changes Lending Limit increase High-Value Homes Business Cash-flow ATR Rule Seller Contribution Low Credit Score Credit Score down to 500 Non-Qualifying Loan DSCR Debt Property-based loan LLC Jumbo Reverse Second Trust Second Trust Second Trust