Illegal to Rent Property Under a Reverse Mortgage? (lease, credit, lender)
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I just recently found out that the place I'm renting is likely under a reverse mortgage. Therefore, the owner/landlord is collecting rent from me while a third-party company is paying for the house and possibly giving him an extra credit line. Is it illegal for my landlord to be renting this property? I'm in Los Angeles, Ca. As far as I understand, the owner must maintain occupancy personally as his/her primary residence. If illegal, would this be easy to get out of my lease? I have been wanting to move for awhile considering it's been a terrible experience with this landlord. Thanks.
I just recently found out that the place I'm renting is likely under a reverse mortgage..
But you're not certain. Instead of looking for an inventive way to break your lease, take advantage of an early termination clause in your lease (if there is one) or rely on the fact that if you break your lease your LL has a legal obligation to mitigate his damages and re-rent the property. The most you'll likely end up paying is two month's rent.
I just recently found out that the place I'm renting is likely under a reverse mortgage. Therefore, the owner/landlord is collecting rent from me while a third-party company is paying for the house and possibly giving him an extra credit line. Is it illegal for my landlord to be renting this property? I'm in Los Angeles, Ca. As far as I understand, the owner must maintain occupancy personally as his/her primary residence. If illegal, would this be easy to get out of my lease? I have been wanting to move for awhile considering it's been a terrible experience with this landlord. Thanks.
It is usually a requirement to be a permanent resident when you get a reverse mortgage. You can inform their bank(if you know who it is) but no it is not a point to get out of your lease. It's not illegal just contrary to the agreement with the bank.
IF you want to move because you feel there is illegal activity going on, tell them that and see what is there response. Any loan broker can tell you who their lender is. Their lender will not discuss any loan terms with you, I don't know how you would report potentially fraud.
You lease would be binding regardless of their mortgage situation, you might just have additional leverage to ask to get out of the lease.
Last edited by thelopez2; 03-13-2014 at 07:35 AM..
Is it a law, regarding reverse mortgages or is it bank policy. And anyway, there are two separate contracts here. The owner has a contract with his mortgage company and you have a contract with the owner. Failure to perform one contract does not necessarily have anything to do with the other.
Is it a law, regarding reverse mortgages or is it bank policy. And anyway, there are two separate contracts here. The owner has a contract with his mortgage company and you have a contract with the owner. Failure to perform one contract does not necessarily have anything to do with the other.
Exactly. One has nothing whatsoever to do with the other. The OP doesn't even know with any certainty that the LL even has a reverse mortgage but is seeking to break his lease without penalty. It won't fly whether or not his assumption is correct.
The OP can either pack up and leave relying on the LL's legal obligation to mitigate damages or, if there is an early termination clause on his lease, exercise his right under that clause. The landlord's financial and contractual obligations to his lender have no bearing on the OP's situation.
I just recently found out that the place I'm renting is likely under a reverse mortgage. .........
How did you find that out? The mortgage company will not give you any financial information about your landlord. The landlord's insurance company, who knows who the mortgage company is, will not give you any financial information about your landlord. The county tax collector does not know who has the mortgage,.
An escrow company won't tell you. When I sell, I have to give the escrow written permission to contact my mortgage company and there is a form I sign, giving the mortgage company permission to give the balance to the escrow company.
If you have been opening the landlord's mail, that is a federal offense, and I suggest that you both stop doing that and stop telling people you have done it.
There is no LAW that says a property owner can not rent out a place with a reverse mortgage. The landlord might have a contract with the mortgage company that says he can't.
If you want out, get out your lease and see what it says about buying out your ease. Follow what is given in the lease, and off you go, to your new residence.
My county's web site has the entire signed/notorized mortgage document available on their web site. Including rate and riders and terms. If there is a 2nd mortgage or line of credit, that's available as well. Just saying that this isn't necessarily a secret.
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