Terrific article that puts the terminology surrounding reverse mortgages in better context and explains it so normal people can understand. As the article denotes, with a Reverse Mortgage, foreclosure is not necessarily a bad thing. Foreclosure is nothing more than the legal mechanism that follows state protocol that allows the lender to take control of the property and initiate recovery of their security interest. With a reverse mortgage it is not uncommon for the property to be under water after expected selling expenses. It is also not uncommon for the family not to want to have to retain the property or invest in the property for resale. The non-recourse aspects a reverse mortgage offers insulates that estate of the deceased and their heirs from these costs. If someone benefited from the reverse mortgage and lived in the property up to the end of their natural lifespan then their objective was met and it can be viewed as a positive financial development. Further, it is important to point out that the foreclosure event will often occur at the end of life for the second spouse who may have resided in the property benefiting from the reverse mortgage for an additional ten plus years. It is unfortunate that the government chooses to use the word 'foreclosure' that carries a very negative connotation but has a very different context with reverse mortgages over traditional mortgages.
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George H. Omilan
President-CEO - NMLS# 873983
Jefferson Mortgage Group LLC
Located in Fairfax County - Helping seniors with Reverse Mortgages in Virginia, Maryland, DC and Pennsylvania.
Questions/Comments encouraged.
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