QUESTIONS?

CALL US: 703-319-2198


Parachute Mortgage Delinquency with a HECM Reverse Mortgage

A parachute from high altitude is always a lifeline.  When a retiree or a senior, whether still working or not, gets into potential trouble with a forward mortgage payment becoming unaffordable, a HECM Reverse Mortgage can serve as a financial lifeline.

If a current mortgage is delinquent, in default, or is forecasted to go that route it is imperative to address this situation to protect the homeowner’s home equity.  A foreclosure by the mortgage lender will wipe out the home equity regardless of loan to value.  There is no law that says the lender does not have the right to recover the money they lent even if a homeowner has a very significant percentage of home equity.

Retirees and seniors are especially at risk of this if they still have forward mortgages on their property with sizeable monthly payments relative to their income.  Many of us would be surprised to see how many people in their mid- seventies carry such mortgages.  This situation is more prevalent with many of our parents that are currently in the 68-78 age group.  This is a somewhat silent remnant of the mortgage crisis.

In a situation where a mortgage is deemed no longer affordable it may be prudent to take out the existing forward mortgage and replace it with a Reverse, thereby creating monthly free cash flow and removing the delinquency that could threaten home equity.  This eliminates the foreclosure risk and the required monthly principal and interest payment that is required each month with the forward mortgage, although applicable taxes and insurance are still required.

In this situation, it is always wise to take action and restore financial balance to the equation.  Waiting for the lender to relent because you have been a good customer for ten years, or a false sense of security because you only owe a small percentage amount, is not the answer.
 

George H. Omilan
President-CEO - NMLS# 873983
Jefferson Mortgage Group LLC
Helping seniors with Reverse Mortgages in Virginia, Maryland and Pennsylvania.

Questions/Comments encouraged.

Comments

Error:
Please enter this text

Comment Submitted!

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