Reverse Mortgage, A Non-Negotiable Instrument

Take a dollar bill in your wallet; it says, “This note is legal tender for all debts, public and private.”  Whoever holds that note has the right to enforce it, that is a note.  Most Mortgage Notes are unconditional to pay sum certain with interest, so most Mortgage Notes are negotiable instruments.  In Florida, whoever has the right to enforce the Note has the right to enforce the Mortgage.  In a Reverse Mortgage, is the promise to pay unconditional? A Reverse Mortgage puts a lien on your house and you have an equity line.  The lender is either going to give you a line of credit up front, or along the way, and when you die, the mortgage is due. A Reverse Mortgage is NOT unconditional; you do not have to pay it.  The Note itself says that the lender’s only way to collect is to sell the property.  It is not negotiable because it IS conditional.  Thus, a Reverse Mortgage is non-negotiable; you cannot transfer it by just signing the back of it.  There is a simple fix—Assignment of Mortgage—but most lenders do not do that. With a regular Mortgage Note, if you endorse it in blank you can […] Read More

Reverse Mortgage Reminder: Pay Your Property Tax

Tis the season to pay your property taxes…even if you have a Reverse Mortgage.  Property taxes and insurance are the homeowner’s responsibility in a Home Equity Conversion Mortgage (HECM), a.k.a. Reverse Mortgage. The FHA’s Reverse Mortgage is for homeowners 62 or older and allows them to withdraw funds from the equity in their primary residence in a fixed monthly amount or a line of credit or a combination of both. A Reverse Mortgage can be the right thing in the right circumstances.  Sometimes a Reverse Mortgage can be the best solution to help an older person live more comfortably—able to afford medicine, food, and basic living expenses—however, it is not right for everyone.  There are positives and negatives which the homeowner needs to know and understand, for instance: Even if your lender is sending you a monthly mortgage payment, it is up to you to pay taxes and insurance on the property.    Read More

Choices in Home Foreclosure

What is good for the goose is not necessarily good for you.  Honking and aggressive behavior may not illicit the desired result in a home foreclosure, or anything else.  However, you do have choices in home foreclosure. There is no single solution to deal with home foreclosure.  It depends on your circumstances—how much equity is in your home, if you are unemployed, if you are retired, if you are raising children or a caregiver for a family member, or if you have a medical hardship. Some of the foreclosure resolutions include: Refinance Forbearance Short Sale Mortgage Modification Reverse Mortgage Hardest Hit Fund (And sometimes) Bankruptcy Just because everybody is flying south does not mean you have to join the flock.  Seek competent financial guidance, such as a HUD-certified counselor or an attorney, to help you determine the choice with the best benefit for you. Read More

Marching Into Home Foreclosure

I was in marching band in Utah, and our last show, we marched into the pool…kind of like home mortgages bundled into mortgage-backed securities. Safety in numbers, investors thought, no way they will all default at the same time.  And thus, homeowners across America marched into foreclosure together. Though many homeowners went together into home foreclosure, there was not a single solution to fit every situation.  Instead, there were many choices.  The best choice for the homeowner depended on the homeowner’s circumstances.  The same is true today, with choices including: Refinance Forbearance Short Sale Mortgage Modification Reverse Mortgage Hardest Hit Fund (And sometimes) Bankruptcy You may need to get a third-party professional involved in order to complete a resolution.  A legal defense of your home foreclosure gives you time to pursue a resolution to bring you the best benefit.  Consult competent legal counsel to review your situation and which strategy is right for you.   Read More

Property Taxes on a Reverse Mortgage

Yes, you have to pay property tax on a Reverse Mortgage, and insurance too. A Reverse Mortgage (Home Equity Conversion Mortgage or HECM) is for homeowners 62 or older and allows them to withdraw funds from the equity in their primary residence in a fixed monthly amount or a line of credit or a combination of both.  But the homeowner is still responsible to pay for taxes and insurance on the property. Reverse Mortgages are not right for everyone.  There are positives and negatives, but sometimes they are the best solution to help an older person live more comfortably—able to afford medicine, food, and basic living expenses.  Even if you have a Reverse Mortgage and enjoy receiving a monthly mortgage income (instead of an expense), you still have to pay your taxes and insurance.   Read More

What Isn’t A Negotiable Instrument?

A Negotiable Instrument is an unconditional promise to pay a certain amount of money and no other undertakings.  It is like a courier without luggage. Some notes are negotiable instruments, but not all. When you buy a car, that note is not a negotiable instrument because that note has so many things with it.  You cannot just say pay to the order of…and endorse it over to someone else.  It is a note, but not a negotiable instrument. Whereas, if you write a check to me, and I lose the check, someone who picks up the check can cash it.  A check is a negotiable instrument. Similarly, most mortgages have notes that are negotiable instruments.  If you have the note, you can transfer enforcement of a foreclose.  A reverse mortgage note; however, is not a negotiable instrument—you cannot endorse it and hand it to someone—possession is not going to work.   Read More

Foreclosure on a Reverse Mortgage

Once upon a time there was a little old woman and a little old man who lived in a little old house they could ill-afford to pay for, and so they took out a reverse mortgage.  Then the little old man and the little old woman expected to live happily ever after, receiving a monthly income from the equity in their home instead of having to make mortgage payments.  However, they forgot to pay their property taxes, and so the bank foreclosed. A Reverse Mortgage (Home Equity Conversion Mortgage or HECM) is for homeowners 62 or older and allows them to withdraw funds from the equity in their primary residence in a fixed monthly amount or a line of credit or a combination of both.  But the homeowner is still responsible to pay for taxes and insurance on the property. To foreclose on a regular mortgage, you just have to be the holder of the note, which has to be a negotiable instrument (similar to a check, which can be cashed even if someone steals it because a check is a negotiable instrument).  The problem with foreclosure on a reverse mortgage is that the reverse mortgage note is not a […] Read More

‘Inheritrance’ – a.k.a. Fear of Reverse Mortgages

‘Inheritrance’ is the mindset of an heir who, under the spell of money, is unwilling to support his parents financially and who views Reverse Mortgage as a threat to his inheritance. If your father has fifty-four grandchildren and if each of those grandchildren gave him $100 a month, he probably would not have to worry too much about his finances.  Or you could give him $5,400 a month.    On the other hand, for someone 62 or older living on a fixed income who has increased expenses—medical hardship, higher utility bills, needs to help out a family member, major home repair—a Reverse Mortgage could be a way to help them meet their financial goals. A Reverse Mortgage (Home Equity Conversion Mortgage, or HECM) is for homeowners 62 or older who have paid off or paid down the mortgage on their primary residence.  The program allows them to withdraw funds from the equity in their home in a fixed monthly amount or a line of credit or a combination of both. My perspective on Reverse Mortgages is that it is not a product for everybody.  To begin with, you have to be 62 or older (and there are other requirements), and there […] Read More

Strategies May Vary with Foreclosure Defense

This little piggy’s house went to short sale. This little piggy refinanced his home. This little piggy got a reverse mortgage. This little piggy got a modified loan. And this little piggy cried, “Free!  Free!  Free!” all about his home. Homeowners in foreclosure have one thing in common:  missed mortgage payments.  Beyond that, there is no single solution to deal with home foreclosure.  It depends on your circumstances—how much equity is in your home, if you are unemployed, if you are retired, if you are raising children or a caregiver for a family member, or if you have a medical hardship. Some of the foreclosure resolutions include: Refinance Forbearance Short Sale Mortgage Modification Reverse Mortgage Hardest Hit Fund (And sometimes) Bankruptcy However, you may have to get a third-party professional involved in order to complete a resolutions.  A legal defense of your home foreclosure gives you time to pursue a resolution to bring you the best benefit.  Consult competent legal counsel to review your situation and which strategy is right for you. …By the way, the fifth little piggy was dreaming.  A free home is not the standard result of a foreclosure defense. Read More

Taxes & Insurance

Unpaid taxes and insurance are a problem with any mortgage.  The same is true for a Reverse Mortgage. A Reverse Mortgage (Home Equity Conversion Mortgage or HECM) is for homeowners 62 or older who have paid off or paid down the mortgage on their primary residence.  The program allows them to withdraw funds from the equity in their home in a fixed monthly amount or a line of credit or a combination of both. With a Reverse Mortgage you do not have a monthly mortgage payment, but you still have to pay your property tax and homeowners insurance.  Sometimes a Reverse Mortgage is the best solution to help an older person live more comfortably; however, a Reverse Mortgage is not for everybody.  To begin with, you have to be 62 or older (and there are other requirements), but beyond that, it depends on your circumstances whether a Reverse Mortgage is an advantage or a disadvantage. Having an attorney look over your shoulder can help you get the deal you think you are getting.  An attorney who represents you and only you can help watch out for your interests and make sure you understand the terms of the Reverse Mortgage contract, […] Read More