Jump to Navigation

Reverse mortgages lead to irregular foreclosure threats

Michigan residents may want to learn of a matter raising concern among children whose parents opted for reverse mortgages. While reverse mortgages are a way to provide older homeowners with cash for their retirement, statistics have shown that the children of these homeowners are standing to lose the houses soon after their parents' passing. The financial institutions that helped their parents to remain in their homes are now threatening foreclosure against the children.

Homeowners who have reached the age of 62 have the opportunity to borrow funds through a reverse mortgage program against their home's value. The loans are only to be paid when homeowners die or move out of the house. Numerous reports have been received from children of the aged homeowners who were threatened with foreclosure, only days after the passing of their parents. Hundreds of homeowners are desperate to keep the homes after the death of their parents, but are not aware of the federal rules related to reverse mortgages.

Under these rules, the financial institutions holding the mortgages are required to offer survivors the opportunity to pay a settlement amount on the loan. This should be a discounted amount equal to 95 percent of the present market value of the property. However, many mortgage companies have threatened homeowners with foreclosure, only days after their parents died, if the full loan amounts are not immediately settled. Michigan homeowners who have been threatened with foreclosure under similar circumstances may want to take note of these federal rules. Survivors are to be allowed at least 30 days after the due date of the loan, to decide whether they want to keep the house, in which case they have six months to acquire financing.

If this seems intimidating, affected homeowners may wish to seek help relating to their best options in handling the situation and protect their interests. Homeowners who are considering getting a reverse mortgage may want to explore the options of personal bankruptcy protection instead. Under Chapter 7 bankruptcy, all unsecured debts may be discharged and homeowners may protect their survivors from facing foreclosure later.

Source: elpasoinc.com, "Bitter inheritance -- Reverse mortgages can push out heirs", Jessica Silver-Greenberg, May 1, 2014

No Comments

Leave a comment
Comment Information
Free Case Evaluation

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close
Arag
Subscribe to this blog's feed FindLaw Network
Marrs & Terry | Personalized, Efficient Counsel | Office Locations

Ann Arbor Office
Marrs & Terry, PLLC
6553 Jackson Road
Ann Arbor, MI 48103

Phone: 734-418-0365
Toll Free: 866-665-8095
Fax: 734-663-9973
Ann Arbor Law Office Map

Jackson Office
Marrs & Terry, PLLC
209 E. Washington, Suite 258
Jackson, MI 49201

Phone: 734-418-0365
Toll Free: 866-665-8095
Jackson Law Office

Credit Cards Accepted | VISA | MasterCard | American Express