I’m sitting here, thinking about the new lending limit of $417,000 that HUD has decided to use for Reverse mortgages. The problem with it, is that it’s not high enough to help all of the Senior community. Yes, it’s better than before, but it’s not helping those Seniors who are stuck with payments on large loan balances.
I have found, that most Seniors, if they have a mortgage, the balance is usually pretty small. But unfortunately there are many of them that took advantage of the lower interest rates the last few years and the “No proof of income” requirement and took out loans that they would have never been able to qualify for, much less be able to make the payment that would be required.
I have a situation right now, where my client is so over encumbered, that she would have to bring in $30,000 to complete a Reverse Mortgage. Of course she is approved for the loan but due to her youngish age, the amount of funds from the Reverse loan ( It’s calculated on her age), can’t cover all that she currently owes on two mortgages that she has.
If only HUD had decided to use the larger figure of $625,000 that they were considering for the new lending limit, I would be able to help my client. She’s disabled, on SSI and using the funds from a traditional line of credit to make her two mortgage payments and has no other money.
She’s heading for a foreclosure if I am unable to negotiate with the lender to reduce the payoffs so that we can complete her Reverse loan. And I’m pretty upset about this and very angry at “those” who put her into this position.
Another example of greed and stupidy of the lending industry. It’s hurting the Seniors, too.