Even Reverse Mortgages to Homeowners May End Up on Foreclosure Docket
As foreclosures have surged in Florida and nationwide in recent years, even reverse mortgages that do not require any monthly payment and instead funnel money to the homeowner could soon be added to the litigation list.
That’s because the homeowners, who generally are elderly, still have to pay property tax, insurance and other household upkeep costs, and many who are struggling lack the money for these expenses, explains the Orlando Sentinel.
Although it’s possible to have a reverse mortgage paid out in monthly installments, many senior citizens have opted to take the money in a lump sum. That can leave them without funds if they are scammed or simply don’t use the money wisely.
There are 30,000 homeowners in “technical default” on their reverse mortgages nationwide, and more than 5,000 of them live in Florida. Many are only now getting far enough behind to appear on the radar screens of those in the foreclosure industry.
Workouts, though, may still be possible.
“We are just starting to look at the problem and assess the extent of it,” says Sue Hunt of CredAbility Group, a nonprofit credit counselor in Atlanta.
“What we have is an accumulation of several years of possible defaults that have never been addressed,” she explains. “The hope is that, by working with people, we will be able to solve most of the problems, and that will leave only a small bucket of them still in trouble.”
