losing your home
Can a reverse loan be used to stop a foreclosure on a seniors property? Yes, it can but it must meet the other loan requirements per the lender.
Sadly, some senior homeowners have found themselves unable to keep up with their mortgage payments or property taxes because of unexpected events such as a health crisis or a major repair to their home and they end up falling behind on their payments, triggering a foreclosure.
If they are not too deep into the process and apply for a reverse loan, there is a good possibility that it can be stopped and they won’t lose their home.
Here is what a reverse mortgage lender will need in regards to the foreclosure from the potential borrower.
- Proof of foreclosure and the dates associated with it.
- A letter from the attorney handling the foreclosure confirming that the payoff is not a short pay.
- Confirmation that the borrower is still occupying the property
- Confirmation that the borrower is still the legal, vested owner of the property.
- Confirmation that the Sheriff’s sale has not taken place, OR that the borrower is still within the redemption period AND vested in title.
- The borrower must provide a letter of explanation describing what happened to them and what steps they took to avoid having a foreclosure.
Documentation must be provided by the borrower for the reason they fell into foreclosure, which could have been due to income loss, large and unexpected medical expenses or other viable reasons.
This is a very simple overview about using a reverse loan to stop a foreclosure that is in process, however there are additional qualifications regarding “residual” income , the amount that is “owed” and if there is enough remaining equity in the property to complete the transaction.
Please contact me for more details and/or a quote and I will answer any questions about the process and what you need to know.