How A Reverse Mortgage Borrower Can Lose The Property Ownership

The reverse mortgage borrower has the responsibilities to take care of the property

like a decent man does and this is totally natural, because after the loan running time the property, or the home, will be sold and the loan capital, interests and all the costs will be paid away, the rest going to the heirs or the borrower.

Against the general information a senior can lose the reverse mortgage loan and maybe also the property, if he or she will not take care of certain things. This short article goes through these things, but to get customized details, you better contact the counselor or other expert. Note, that if a borrower does not take care of these things, the lender can request, that the borrwoer has broken the loan terms and to claim that he must pay back the loan.

1. Keep The Property In A Good Shape.

One factor, which determines, how much loan a senior will get, is the appraised value of the home. The condition of the property will influence on this value and thus also on the future selling price. This makes it important to keep the property in a good shape.

2. Pay The Property Insurances.

The propert insurances are meant to protect the value of the property against the accidents, like the fire. The lender is very interested about, whether the property has the needed insurances and whether the borrower pays them as agreed.

3. Pay The Property Taxes.

The properties are taxed in most states and these taxes vary also from state to state. It is important to pay the taxes, even with the reverse mortgage loan to keep the reverse loan program going. If a senior has difficulties in doing this, he should take contact immediately to the lender to find the solution.

4. If A Borrower Is Engaged In Fraud.

In this case the lender can claim, that the borrower must pay back the loan, interests and all the costs.

5. Bankruptcy.

If the borrower will go in bankruptcy, that part of the home equity, which is needed to pay the reverse mortgage is separated from the assets. The reverse mortgage loan goes on as planned and will be paid away, when the home is sold using the selling price or additionaly in some cases the mortgage insurance. But in some cases the lender can claim, that the borrower must pay back the capital, interests and all the costs.

As you see from the points above, if the borrower behaves like a decent man and takes care of the property, taxes and insurances, he has no threat to lose the property, nor to pay back the reverse mortgage loan.

by: Juhani Tontti

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