No matter how nice or helpful the salesperson was who sold you the reverse mortgage their job is done when the sale is complete. After you originate your reverse mortgage it will be transferred or sold to a "Loan Servicer" who you will never meet in person, and who recognizes you as a loan number and property address.
Servicing is where 99% of the problems begin and often result in foreclosure. There are 17 legal triggers that can cause the loan to be defaulted and called "due and payable" The most common are death of the borrower, non-payment of taxes and/or insurance, non-occupancy, failure to maintain the property to the Lender's standard.
The majority of reverse mortgages are called Home Equity Conversion Mortgages (HECM) and are Federally Insured. There are very few regulations that give you any rights or protections. The bigger problem is that The Department of Housing and Urban Development (HUD) has no structure or system in place to audit, regulate or enforce any of the consumer regulation rights and protections. HUD does not address individual consumer complaints. Basically, the consumer is left on their own.
List of 27 most common Servicer violations:
If you are experiencing any of these issues with your loan Servicer reach out for help immediately.
Proprietary or Jumbo Reverse Mortgages are not Federally Insured. The Borrower has absolutely no regulatory rights and protections and no agency to turn to for help. Federal Regulations and consumer protections do not apply. The Non-Borrowing Spouse Option is not available in this type of reverse mortgage. If you are experiencing any of the common issues listed in the Servicer Attachment above reach out for help to see if it applies to your jumbo or proprietary reverse mortgage!
There are 17 legal triggers that can cause the loan to be defaulted and called "due and payable"
The main Loan Servicers are: Champion, Reverse Mortgage Solutions (RMS), Reverse
Mortgage Funding (RMF), Wells Fargo, CeLink, Financial Freedom, and JB Nutter.