CONSUMER HELP PROGRAMS
Are you aware that 18% of all reverse mortgage loans are in default for non-payment of taxes and/or insurance?
This is an alarming increase over the already unacceptable 10% reported by HUD a year ago.
It makes no sense to think 1 in 5 Borrowers get a reverse mortgage and choose to give up their home to foreclosure by not paying their taxes and insurance.
WARNING: if you are getting a reverse mortgage you must do the work to determine if a reverse mortgage is "right" suitable for your unique circumstances.
If you are one of the 99% of Borrowers who got a reverse mortgage without determining if it was "right" for you there may be some help for you in certain States.
HARDEST HIT FUND STATE PROGRAMS
In general, the Servicer is supposed to inform the consumer of help programs and initiate the communication with the program on behalf of the borrower. This is not always the case. Make sure you ask your lender about help programs available in your state.
KEEP YOUR HOME CALIFORNIA - RevMap offers up to $25,000 toward payment of taxes & insurance. KeepYourHomeCalifornia.org
FLORIDA ELMORE PROGRAM - Offers up to $50,000 toward repayment of taxes, insurance and/or HOA fees. FloridaElmore.org
ILLINOIS HARDEST HIT FUND - Offers up to $35,000 toward repayment taxes & insurance. Illinoishardesthit.org
MICHIGAN STEP FORWARD PROGRAM - Offers up to $30,000 toward repayment of taxes, insurance, and/or HOA fees. StepForwardMichigan.org
OREGON OHSI PROGRAM - REVERSE MORTGAGE BENEFIT Offers up to $40,000 toward repayment of taxes, insurance and/or HOA fees. oregonhomeownerhelp.org
Lender Force Placed Insurance is another issue - there are no controls or checks from HUD or Loan Servicers to make sure Lender Placed Insurance is legal or valid. Many consumers have reported Force Placed Insurance when the Borrower already has the required insurance. State Programs may pay for force placed insurance premiums under certain conditions. Please check with your State Program.
Some States or County Assessors may have tax assistance programs. Check with your State or County Assessor.
Borrowers must have homeowner's hazard insurance coverage as agreed to in the originating reverse mortgage contract. Beware of Lenders who attempt to add hurricane, flood or other insurance not required by the contract.
Borrowers must occupy the property continuously as their primary residence. The Borrower can be out of the residence for 12 consecutive months before the lender can foreclose on the property. Borrowers must complete and return an annual occupancy certificate stating the occupy the property as their primary residence (even though this is not a requirement in the reverse mortgage contract). This is the way occupancy is supposed to work. Example: One consumer contacted the lender to inform them his wife had died and because of that he was thinking he might sell the property. Ten (10) days later the grieving Borrower was served with a due and payable notice.