U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > New Jersey
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 11-08-2014, 07:42 AM
 
Location: Pennsylvania & New Jersey
1,519 posts, read 3,958,965 times
Reputation: 1674

Advertisements

Quote:
Originally Posted by daliowa View Post
...One thing I don't understand is why the OP (as executrix) didn't sell the house immediately.
Patti informs us that the house has no equity (the mortgage balance equals or exceeds its value) and there are past due property taxes and maintenance fees. Without the trouble of a short sale, the house cannot be sold because more money is owed on the house than what it's worth. Hence, giving the bank a deed in lieu of foreclosure is the quickest way to settle the problem.

Except... the back housing association (HOA) fees may be a subordinate lien against the property. In that case, either a) the HOA will have to agree to dissolve its lien when the deed in lieu is given to the bank, or b) the bank will not be able to accept the deed in lieu and will have to foreclose regardless.

Full circle, now it makes sense that the HOA asked for the quit claim deed. As a subordinate lien holder, the HOA may take the deed subject to the existing mortgage. This would protect their back fees, but they would only do this if they thought there was equity remaining in the property since the HOA would then become liable to the bank for the entire mortgage and back taxes.

Which brings us back to point #1: Speak with a competent attorney!
Rate this post positively Reply With Quote Quick reply to this message

 
Old 11-08-2014, 07:35 PM
 
Location: Cranford NJ
1,049 posts, read 3,791,738 times
Reputation: 403
Reverse mortgages usually only allow the property to be mortgaged for a maximum of 80% LVR. Therefore unless the property went into major disrepair, there should be some equity. With back taxes and HOA fees due, Without a breakdown of the figures it would be hard to determine if a break even, or possible short sale is possible.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-09-2014, 12:57 AM
 
2,996 posts, read 5,190,807 times
Reputation: 3078
Quote:
Originally Posted by Sergio M View Post
Reverse mortgages usually only allow the property to be mortgaged for a maximum of 80% LVR. Therefore unless the property went into major disrepair, there should be some equity. With back taxes and HOA fees due, Without a breakdown of the figures it would be hard to determine if a break even, or possible short sale is possible.


My late Mom had a reverse mortgage. They're very careful about not lending more than can be recouped at sale of the house. In fact, they won't even lend close to the amount that the house could sell for.

They're also careful about checking that taxes & such are always up-to-date. There were forms that had to constantly be filled out regarding this & submitted to the reverse mortgage lender.

As Sergio said, the house may have suffered in some way that brought the value way down.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-13-2014, 08:42 AM
 
Location: Pennsylvania & New Jersey
1,519 posts, read 3,958,965 times
Reputation: 1674
Quote:
Originally Posted by Sergio M View Post
Reverse mortgages usually only allow the property to be mortgaged for a maximum of 80% LVR. Therefore unless the property went into major disrepair, there should be some equity. With back taxes and HOA fees due, Without a breakdown of the figures it would be hard to determine if a break even, or possible short sale is possible.
Quote:
Originally Posted by daliowa View Post
My late Mom had a reverse mortgage. They're very careful about not lending more than can be recouped at sale of the house. In fact, they won't even lend close to the amount that the house could sell for.

They're also careful about checking that taxes & such are always up-to-date. There were forms that had to constantly be filled out regarding this & submitted to the reverse mortgage lender.

As Sergio said, the house may have suffered in some way that brought the value way down.
Sergio and daliowa make excellent points, and absolutely correct! But banks got much more conservative on reverse mortgage loan-to-value (LTV) ratios after the real estate bust.

During the go-go years of the housing bubble, many banks were nearly as aggressive with reverse mortgages for seniors as with primary purchase mortgages for unqualified borrowers. If the bank made a high LTV (60%) reverse mortgage around 2006, it would not surprise me if they're now underwater.

For example, assume 60% LTV, plus 8 to 10 years interest, plus 5+/- years back taxes, minus 20% drop in fair market value... I could easily see the debt exceeding the current value.

Regardless, best advice given OP (who hasn't been back since her original post) was to see a competent attorney. I hope Patti did so.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 11-13-2014, 01:29 PM
 
2,996 posts, read 5,190,807 times
Reputation: 3078
Quote:
Originally Posted by MaverickDD View Post
Sergio and daliowa make excellent points, and absolutely correct! But banks got much more conservative on reverse mortgage loan-to-value (LTV) ratios after the real estate bust.

During the go-go years of the housing bubble, many banks were nearly as aggressive with reverse mortgages for seniors as with primary purchase mortgages for unqualified borrowers. If the bank made a high LTV (60%) reverse mortgage around 2006, it would not surprise me if they're now underwater.

For example, assume 60% LTV, plus 8 to 10 years interest, plus 5+/- years back taxes, minus 20% drop in fair market value... I could easily see the debt exceeding the current value.

Regardless, best advice given OP (who hasn't been back since her original post) was to see a competent attorney. I hope Patti did so.



My late Mom's reverse mortage was well before 2008. The RM company kept close tabs on many things, i.e. that my Mom was still living in the house, that taxes were paid, that the house was maintained in good repair (they sent inspectors.)
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > New Jersey
Similar Threads

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top