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Replies (6)
- shapiroamg
- Contributions:3058
Assuming this is a traditonal FHA Reverse. Since this is a reverse, the FHA mortgage insurance will cover the shortfall between the sales price and the loan payoff (inc all the fees and costs associated with selling).
- shapiroamg
- Contributions:3058
Right from the HUD website:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecmabou
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecmabou
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I think you need to speak to your lender regarding the fact that you are selling the home and expect a shortfall. There may be an extra step the lender may need (such as additional market analysis or appraisals) to show you are selling at a legitamate loss and not part of a sweetheart deal to a relative or friend (non arms lenth transaction).
Assuming there is a shortfall and FHA pays a claim from the MI fund, you might have an issue getting another FHA loan in the future.
- shapiroamg
- Contributions:3058
http://www.reversemortgage.org/AboutReverseMortgages/BasicFeaturesReverseMortagage/tabid/658/Default.aspx
One more link. note the last bullet point.
One more link. note the last bullet point.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
basil,
Shap provided all the information you need.
Best wishes, Rudi
Shap provided all the information you need.
Best wishes, Rudi
- Raymond Denton, "Raymond Denton"
- Contributions:7
Contact the company that's servicing the Reverse Mortgage and explain the situation, and tell them you'd like to provide them back the deed in lieu of foreclosure. That'll allow you to walk away from the house without having to sell it, and the insurance premiums you've been paying to HUD will cover the shortfall.
- wayne lancaster, "funds2"
- Contributions:1177
As mentioned, if you default on loan there will be consequences that will delay your ability to finance another mortgage for 3-7 yrs. Since you have no mortgage payment a "hardship" would not appear to apply.
In fact not having a mortgage payment may be a better place to be than alternative(s) you might consider.
Seek legal advice before you default on a mortgage to know your financial and legal consequence.
In fact not having a mortgage payment may be a better place to be than alternative(s) you might consider.
Seek legal advice before you default on a mortgage to know your financial and legal consequence.
I have a reverse mortgage.
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