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QUESTION:
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Walk away or ending a reverse mortgage contract | | My mother has moved permanently out of the reverse mortgage property. The balance of the loan is now more than the current market value. Have written letters stating we want to "let the house go" and have also requested cessation of monthly credit line checks. The lender has not responded to our many requests. The property is in CA and my mother lives with me in AZ. How doe one get out of ownership since foreclosure doesn't apply to this type of loan? The previous letters stated that she no longer resides nor will ever move back to the property. She is still paying taxes, insurance and utilities. Please advise as letters, faxes and phone calls have not gotten results in how to relinquish back to lender. Does my mother have to try to sell it as a short sale? She just wants out! Thanks |  | asked by cheryl la rue, 3/16/2010 |
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Categories:
Reverse Mortgages
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| ANSWERS: | | Answered by: Adakin Valorem, 03/19/10
Overall Rating:  Be the first to rate it. | Cheryl, when the loan was first originated, the borrower (your mom) was required to fork over 2% of the loan value (or add it to the loan amount) for a MIP (Mortgage Insurance Policy).
I always thought that MIP was to protect the lender in the event of default of payment by the borrower, but as you know, there are no payments with a Reverse Mortgage. I'm not an expert with this, but as a reverse mortgage borrower myself, I was told that the MIP was to protect the lender in the exact event you describe (i.e. the value of the collateral being less than the value of the loan).
I would suggest checking whom ever provided the coverage for the MIP (the insurance company) and try to contact them directly. They would know who the actual investor is and bypass the servicing entity that is stalling.
Also, It appears that the servicing entity may not be doing their fiduciary duty of protecting their investor since the longer they wait and not respond to your inquiries, the greater the loss being incured by the investor as the loan balance continues to accrue every day they delay.
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Okay, will someone now please answer my question below?
Thanks Adakin Valorem Login to rate this answer: | | Answered by: pwirth, 06/12/10
Overall Rating: Be the first to rate it. | Adakin is right on the mark, if the servicer/lender is not responding, shame on them. You can contact the Department of HUD's Homeownership Center in Santa Ana, CA at 714-796-1200. If your mom's property is not in their jurisdiction, they can direct you from there.
Best regards. Login to rate this answer: |
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