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Reverse Mortgage LESA (Life Expectancy Set-Aside) — How It Works, Growth Rate & FAQs

January 22, 2024 55 comments

A key development in the overhaul of HECM guidelines was the introduction of the LESA. This requirement is a response to past challenges where borrowers, after receiving a lump-sum equity payment, struggled to meet essential obligations such as homeowners insurance, property taxes, and home maintenance to FHA standards, leading to defaults. The LESA is designed to ensure that property charges...
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Is a Reverse Mortgage Right for You? 3 Key Considerations

January 22, 2024 8 comments

Like many of our readers who are navigating retirement, you might wonder if a reverse mortgage is right for you. You've likely seen your equity grow substantially, possibly even owning your home outright - a common scenario for many baby boomers. Your home, often your largest asset, may lead you to consider the option of a reverse mortgage. At All...
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5 Ways To Lose Your Home With a Reverse Mortgage

January 22, 2024 35 comments

With a federally insured Home Equity Conversion Mortgage (HECM), the borrower retains ownership of the property while continuing to live there throughout the loan. They are not required to make monthly mortgage payments during that time. Reverse mortgages are often misunderstood, and a common misperception is the idea that in a reverse mortgage, "the bank takes the home." On the...
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Reverse Mortgage Amortization Schedule — How Your Loan Balance, Interest & Equity Change Over Time

January 20, 2024 6 comments

Before you decide if a reverse mortgage fits your needs, it's smart to look at how the loan could grow and how your home equity might change over time. One of the best tools for this is the reverse mortgage amortization schedule. This schedule shows a year-by-year estimate of your loan balance. This interest will be added, any available credit...
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Reverse Mortgage Principal Limit & Maximum Claim Amount — How Your Loan Amount Is Calculated

January 15, 2024 20 comments

I am 87 and received a HECM Loan. The maximum claim is $250,000. Due to age and other factors, the credit limit was expected to reach the maximum claim limit. Withdrawals were denied when the balance was around $225,000, and no withdrawals have been allowed since the servicer has been getting compound interest each month. HUD has been assessing fees...
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What to Do If Your Home Suffers Fire Damage with a Reverse Mortgage

October 25, 2023 24 comments

UPDATE: The devastating fires in Los Angeles County prompted the Federal Housing Administration to publish FHA Info #2025-07 as a reminder to lenders about its guidance for servicing and originating FHA-insured mortgages in Presidentially Declared Major Disaster Areas (PDMDA). FHA provides HECM lenders an automatic 90-day extension from the date of the PDMDA foreclosure moratorium expiration date to commence or...
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How Long Can You Leave Home with a Reverse Mortgage?

October 25, 2023 90 comments

How long could that homeowner be absent (e.g., on an extended vacation) before they would be considered not residing in the house? Would they be allowed someone else living in the house to care for them? I will start with the second question as it is more straightforward to answer without reservations. The reverse mortgage does not prohibit a borrower...
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5 Memorable Reverse Mortgage Spokesmen

October 16, 2023 8 comments

Reverse mortgages have had many famous faces over the years. From iconic television and film actors to one-time US presidential candidates, celebrities from all walks of life have espoused the many advantages a reverse mortgage can provide for older homeowners in their retirement years. While spokesmen have come and gone over the years, let's take a look at some of...
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How to Get Out of a Reverse Mortgage: Your Options Explained

October 10, 2023 43 comments

I have a reverse mortgage, and I’m having problems with it. Was it legal to get a reverse mortgage without my lawyer explaining the situation? I never knew the pros and cons of a reverse mortgage. I think it’s a legal way to swindle homeowners out of their homes. How can I get out of the reverse mortgage? I’m sorry...
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How to Buy Reverse Mortgage Property at a Foreclosure Auction

October 5, 2023 no comments

I am a Professional Real Estate Investor in Florida. I purchase a lot of properties at the foreclosure auction at the clerk of the courts. My questions are: 1. Is there a way to find out what is owed on a reverse mortgage on a property going to the auction? 2. Is there a formula to calculate the maximum borrowed...
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