I Was Omitted from Reverse Mortgage Contract

Hi Janet, Under HUD guidelines, you and your husband must refinance the reverse mortgage to add you on the note and to title. Adding you would be considered as a "benefit to borrower". Since most lenders, including the one I work for has recently waived origination fees and servicing fees, the cost would be considerbly less today. Also, you would be eligible for a reduced mortgage insurance premium taking into consideration what was paid when your husband did the loan the first time. Do keep in mind that it is important to get you on the note in case your husband deceases you first - you would be required to pay off the mortgage in full if that were to occur. Regards, Paul Wirth, CMB

We were told by the Wells Fargo that the value of the house would have to be appraised at $400,000.00, and that I cannot be added.

Some borrowers decide to do a reverse mortgage without the spouse when they are under age 62. When the Reverse Mortgage was obtained, it was tied to the borrowing spouses life expectancy and residency. When I have borrowers that make this decision, I tell them that the spouse left off title will be forced to do something with the home when the spouse on title passes or moves permanently from the home. Some of my non borrowering spouses don't wish to keep the home, for them its a given. The loan is paid off through the proceeds of the sale of the home. For those that wish to keep the home, they have a few options. The first is to make sure there is a Living Trust in place that has been approved and accepted by the lender. Then, if the spouse on title passes, ownership is not an issue. The spouse left would than refinance the home with a reverse mortgage. The second is to refinance before that occurs when the appraised value is sufficient to pay off the existing reverse mortgage. I don't recommend doing it just to add a borrower, but only if there is another benefit, as the non borrowering spouse will be forced to do it when the borrowing spouse passes or moves permanent out anyway One other note: there is no guarantee that the home value or interest rate will be enough to pay off the existing reverse mortgage at some point in the future. If this is enough of a benefit to refinance your reverse mortgage, do it when the home value allows.

Very Odd...That was a nicely formatted reply when I posted it, now its a big blob of words.

I apologize that its hard to read.

Tam