The Ins and Outs of Reverse Mortgages, & What Needs to be Done to Make These Financial Instruments Safer for the Baby Boomer Generation. Yohan Gomez. What is a Reverse Mortgage?.
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The Ins and Outs of Reverse Mortgages, & What Needs to be Done to Make These Financial Instruments Safer for the Baby Boomer Generation
ICurrent Issues in Reverse Mortgages Foreclosures:Rights of Surviving SpousesCan Surviving Spouse Remain in HomeDoes Spouse Have to Sign Loan DocumentsEffect of Homestead Rights in FloridaRights of Other Heirs To Satisfy
HECM Statute on Surviving Spouses
12 U.S.C. § 1715z-20(j) Safeguard to prevent displacement of a homeowner
The Secretary may not insure a home equity conversion mortgage under this section unless such mortgage provides that the homeowner’s obligation to satisfy the loan obligation is deferred until the homeowner’s death, the sale of the home, or the occurrence of other events specified in regulations of the Secretary. For purposes of this subsection, the term “homeowner” includes the spouse of a homeowner.
Mortgagor means each original borrower under a mortgage. The term does not include successors or assigns of a borrower
Effect of Florida Homestead Laws wh ?
24 C.F.R. § 206.125(c) Sale by Mortgagor
If the mortgage is due and payable at the time [a] contract for sale is executed, the mortgagor may sell the property for at least the lesser of the mortgage balance or five percent under the appraised value…..
Compare:Mortgagee Letter 2008-38, issued by HUD in December 2008, all such sales must be at arm’s length.
Effect:Stranger can buy the property for 95% of appraisal but surviving spouse or heir pays full HECM balance
Question: Is this Really What Congress Intended???