I just read a very sobering article from the AARP Bulletin about Americans over 55 and debt. I know that many senior homeowners I work with daily have 25 plus years to pay on their current mortgage and no plan of how they are going to pay it off. In cases like that, a reverse mortgage may make good financial sense if the homeowner wants to remain in their home with no mortgage payments. Homeowners should alwasy be aware though that they will continue to be responsible for payment of property taxes and homeowners insurance...
"A generation ago, many Americans worked toward paying off their mortgages and retiring with little, if any, debt. Today, a growing percentage of older workers are heading in the opposition direction. " See link to AARP on my sidebar.
Deborah Nance, Reverse Mortgage Professional for Corona, the Inland Empire and Southern Californa.
Curious to know how this all works for folks whose value has dropped and have lost most or all of their equity?
This is indeed a sobering analysis and it looks like we will see the fall out for years to come.
Mike, you bring up a very good point. When a senior homeowner is upside down on their home, we usually cannot help them. On occasion though, existing lenders have been willing to do a "short-payoff" reverse mortgage refinance by cooperating with the new reverse mortgage lender to refinance and thus allow the senior to remain in their home with no more mortgage payments. (I think they are worried about the "Bank Forecloses on Senior Citizen" headlines) It's not easy, but has been done. Here is a link to an article about a specialty title company, Premier Reverse Closings, and how they and a reverse mortgage professional helped to save a homeowner from foreclosure.
<ahref="http://www.reversemortgageadviser.com/blog/news/revese-mortgage-saves-man-foreclosure/" >Revese Mortgage Saves a Man from Foreclosure</a>
However, there are many seniors who DO have adequate equity and still struggle to make mortgage payments and are on the verge of default. If they want to stay in their home, a reverse can make excellent sense for them and really give them peace of mind.
Thank you for reading and responding to my posts. Active Rain rocks!