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Old 06-18-2019, 01:04 PM
 
Location: DFW - Coppell / Las Colinas
31,974 posts, read 36,604,313 times
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I have talked to 10-15 people with RM's who want to try and get out from under them by selling their home.

They really regret doing them and they are almost impossible. I have yet been able to help anyone.

I always say a BIG NO when people ask. Do anything but, go and sell and lease an apartment if you must. Take your equity out of the house.
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Old 06-18-2019, 01:52 PM
 
71,470 posts, read 71,652,652 times
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Reverse compounding interest and fees ainít your friend ...they can eat up equity so fast you may as well fling dollars out the window
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Old 06-21-2019, 12:55 PM
 
Location: Proxima Centauri
4,795 posts, read 1,980,636 times
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Quote:
Originally Posted by mathjak107 View Post
Reverse compounding interest and fees ainít your friend ...they can eat up equity so fast you may as well fling dollars out the window

My professors touched on all of that in grad school. You are absolutely right. If I remember my instructors correctly, this would involve the time value of an annuity and they would be free to play games with the interest rate.



What I noticed in the article was that they are targeting six inner city areas in their foreclosure efforts. These are probably areas that are ripe for gentrification.
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Old 06-21-2019, 01:50 PM
 
3,247 posts, read 844,077 times
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Quote:
Originally Posted by Tonyafd View Post
My professors touched on all of that in grad school. You are absolutely right. If I remember my instructors correctly, this would involve the time value of an annuity and they would be free to play games with the interest rate.



What I noticed in the article was that they are targeting six inner city areas in their foreclosure efforts. These are probably areas that are ripe for gentrification.
Probably.

I think foreclosure is just the assumed outcome of every RM. My personal anecdote involved a property in a town of 3,000. A suburb to a suburb. In my link mentioned earlier in this thread, we couldn't get a hold of Celink (loan servicing company for Financial Freedom) quite literally to ask how much to write the check for and who to send it to.

After a rescheduled closing date due to missed deadlines on their part, we were able to exercise the heir-option to buy and pay the outstanding balance, instead of FMV. About 30% less than similar homes in the neighborhood were going for.

------------------------

My question is this: Are these RM lenders getting to triple dip - 1.) write off the defaulted loan on the often enormous balance, 2.) receive funds for any deficiency from HUD who guaranteed the HECM, AND 3.) receive the proceeds from the foreclosure sale? It mentions assigning the mortgage, but nothing is ever mentioned in regards to any entity taking possession of the home in exchange for the claim payout.

https://www.hud.gov/sites/documents/42351C1HSGH.PDF

Last page and second-to.
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Old 06-22-2019, 02:45 AM
 
1,769 posts, read 2,440,841 times
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Do not even get me going on this one. My grand parents (immigrants/ coal miner)worked so hard to acquire a home. Then, when they passed, I sent my Mom a great deal of money to buy out her brother, who jointly inherited the home. My Mom was addicted to casinos, and reverse mortgaged the home, in which I have a great deal of money. It makes me ill to think about it. My grandparents are probably doing back flips in their graves over it. And some people wonder why I don't have much affection or respect for my mother.
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Old 06-23-2019, 10:18 AM
 
29,764 posts, read 34,851,819 times
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Quote:
Originally Posted by Tonyafd View Post
My professors touched on all of that in grad school. You are absolutely right. If I remember my instructors correctly, this would involve the time value of an annuity and they would be free to play games with the interest rate.



What I noticed in the article was that they are targeting six inner city areas in their foreclosure efforts. These are probably areas that are ripe for gentrification.
Or the article is targeting those cities to make a point. Obviously those with the greatest need are most likely to take out a RM. if your roof is leaking and your heat is broken and you have no money or source of money other than the RM are you their victim or just in poor circumstance.
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Old 06-23-2019, 10:39 AM
 
Location: Prescott AZ
6,119 posts, read 9,071,114 times
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The reverse mortgage has worked very well for me. I sold my house and wanted to purchase another in a different area. I made a down payment and got the RM at 5%, which is a fixed rate. Sure, it would be nice if it went down, but it doesn't go up either. There are no other fees. I pay the taxes, insurance, mortgage insurance and any fix ups on the house. I do not have to make house payments ever, but lately have been paying a small amount monthly since the loan is appreciating fast and I want to keep it down. I may want to sell in the future so I don't want the loan to become enormous.

Everyone has their own opinions about RM. This is mine and it's working for me. There was no other way I could afford to live in the area I wanted to live.

And yes. You MUST keep up on the taxes, insurance, etc. Otherwise you face foreclosure.
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Old 06-23-2019, 11:07 AM
 
71,470 posts, read 71,652,652 times
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Reverse mortgages to purchase are very different then a conventional reverse mortgage .. I actually looked in to one..but to be honest the terms are very poor ...they are considered high risk mortgages ...they would have consumed equity so fast that even though I didn’t care in the end , in good consciousness I could never accept terms like that, because of how fast they ate equity up
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Old 06-23-2019, 11:34 AM
 
29,764 posts, read 34,851,819 times
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My sister took out a reverse mortgage with a line of credit. After she passed the RM compNy took a beating on the loan.
Also in low income areas with decking home prices and decreased valuations RM companies have taken big hits.
In my sisters case my niece maxed out her mother’s credit cards and drained her savings and maxed the RM line of credit to pay for visiting nurses, assisted living and finally a nursing home. She followed the process to eventually qualify my sister for Medicaid. My sister passed just as Medicare was due to kick in for the nursing home. Her condo was a mess in need of much work. The RM company gave my accountant niece a year to sell it. She couldn’t and then turned the keys over to the RM company to eat the loss.
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Old 06-24-2019, 12:50 PM
 
3,247 posts, read 844,077 times
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Quote:
Originally Posted by TuborgP View Post
My sister took out a reverse mortgage with a line of credit. After she passed the RM compNy took a beating on the loan.
Also in low income areas with decking home prices and decreased valuations RM companies have taken big hits.
In my sisters case my niece maxed out her motherís credit cards and drained her savings and maxed the RM line of credit to pay for visiting nurses, assisted living and finally a nursing home. She followed the process to eventually qualify my sister for Medicaid. My sister passed just as Medicare was due to kick in for the nursing home. Her condo was a mess in need of much work. The RM company gave my accountant niece a year to sell it. She couldnít and then turned the keys over to the RM company to eat the loss.
My condolences, I am truly sorry to hear that happened.

Don't worry about the RM company. If they cannot sell the home, they assign the mortgage to HUD and file a claim to be reimbursed.
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