Hello,A reverse mortgage may very well be an option. A BK is not an automatic deal breaker. The lender will look to see that you have made your required payments under the terms of the BK agreement on time, and that all your taxes and insurance payments have been made in a timely manner for at least the last 24 months.There will usually be a requirement to explain the reasons for the BK and the lender may still require a Life Expectancy Set Aside (LESA) account where they set funds aside from your proceeds to pay your taxes and insurance but if you have been on time with all your payments and the reason for the BK was out of your control, you may not even be required to have the LESA account. That would be the underwriting call based on your income and credit qualification during the financial assessment of your loan. But the bottom line is that it is entirely possible to get a reverse mortgage if your payments have all been made on time, the court approves it (the court must approve a reverse mortgage while you are in BK but if it benefits your situation, they usually will), and you meet the reverse mortgage requirements.

Hello Sherry, I would never want to dissuade you from trying without looking at your circumstances more in depth, but I need to be honest with you right from the start because you have several things going against you now. The reverse mortgage is meant for single family, residential homes, and traditional "farms". Commercial properties and properties with industrial applications will not be eligible for the program. If your home is a single-family home surrounded by other single family residential properties that happens to have a couple of horse on the property (and is zoned for that), then you would be fine. However, if the property is zoned agricultural or farmland instead of residential and is not considered residential with other predominantly residential properties in the area, it would not be eligible for the HUD HECM (reverse mortgage) program. The next hurdle you will have is the loan amount available for borrowers at your age based on the current interest rates. I do not know your location, so I do not know the exact costs for your area, but based on your ages, the value, and the amount owed you indicated, you would be substantially short to close. You would need to bring in more than $160,000 to pay off your existing loan and close the reverse mortgage, assuming that your mortgage payments, taxes, and insurance have all been paid on time for the past 24 months. Your remaining credit is clear enough after the BK to avoid a set aside for taxes and insurance. If funds needed to be set aside for taxes and insurance, the amount to close the loan could be considerably higher. Finally, while the credit requirements for a reverse mortgage are more accessible than most forward mortgages, a financial assessment portion of the underwriting would consider your past payments of obligations. You would need to have paid all of the BK payments on time, and a minimum of 12 months of the BK payments must have been paid, or the balance would have to be 0 due to the successful completion of the schedule (with on-time payments). Again, the lender must get verification that all property charges have been paid on time for the most recent 24-month history. A set aside would be established in most cases, but with a prior BK, they must also consider your entire payment history for acceptance. Again, I intend not to shut you down before you ever get a chance to try. Still, you need to understand that the amount you receive with a reverse mortgage depends on the age of the youngest borrower and current interest rates (with the amounts starting at the least for the youngest borrowers and growing the older the borrower). Interest rates have risen sharply over the past 18 months, and the minimum age for borrowers under the HUD program is 62, so you are already at the lowest end of the age range. You can always have a lender review your property for acceptability, but if the amount available will not meet your needs, it really won't help. When/if interest rates begin to decline, the amounts available to borrowers will increase. You may want to check back with online calculators such as the one on our website, but I suggest you contact a loan officer independently to see if your property will meet the HUD requirements. It may be best for you to know your options before making any decisions.

Hello Kenneth, This is a tough question and one I cannot just answer for you off the top of my head. There are possible ramifications to either action that you need to consider so that path you choose must be the one that is right for you and your circumstances. For example, it is much easier to get a loan while your credit is still good, and you have no bankruptcy on your credit. Most bankruptcy cases will require acceptable explanations for the need of the bankruptcy as well as the supporting documentation to verify the circumstances. Absent a strong reason for the action, it could affect your ability to get the loan. Then, if you are in a Chapter 13 Bankruptcy with a repayment schedule, you will need to have 12 months of on-time payments as well as the court's approval for you to get the loan. Chapter 11 just needs to be completed but there again, there are still explanations and supporting documentation that must be acceptable. On the other hand, if you decide to close the loan with your current debts and they are excessive, you may have a difficult time with the qualification (reverse mortgages also have income and asset requirements that borrowers need to meet and while they do not employ "debt to income ratio" guidelines, they do utilize residual income requirements that would require you to have a certain amount of income left over after the payment of all housing and debt payments each month). Also, filing a bankruptcy after you close a reverse mortgage would not endanger your loan, but it would cause the lender to put a hold on all disbursements until they could be certain they did everything they needed to do to exempt the loan from the process. That might mean you would not have access to the reverse mortgage for a while. For these reasons, I can't give you a straight answer that might fit all circumstances and I would strongly recommend that you consult with a financial advisor familiar with both the HUD program and Bankruptcy laws to be sure you covered all scenarios and that your needs were met with whichever avenue you decided to take.

Hello Jay, The lender will need to get your mortgage, taxes and insurance payment history and if you have always been current on all property related charges, you most likely will have no problems with your reverse mortgage application. They will look at the payment of other obligations and it will also depend on whether the Bankruptcy has been fully discharged or not as to what other requirements there may be, but be sure to let your lender know from the start so that they can go over your circumstances with you and you know where you stand from the beginning.

Hello Kaye, I cannot give you legal advice. You will need to speak with your attorney to determine what protections you will have from creditors and what they can and cannot do. I can tell you that if you have a line of credit or are receiving monthly payments from the reverse mortgage, there will be an interruption in the availability of funds until the reverse mortgage has been cleared by the Bankruptcy Court. I have never heard of anyone losing their ability to use their reverse mortgage but again, that is a question for your attorney based on your circumstances and I would encourage you to get the answers to all your questions including timing before you file so you know what to expect.

Hello Rhonda,HUD has different guidelines for borrowers with bankruptcies for purchases than for refinances. For a purchase, the borrower must be out of the bankruptcy for at least 2 years and all credit since must be on time. For a refinance, the borrower may even still be in the BK, but you must have a minimum of 12 months of on-time payments under the bankruptcy agreement and the court must approve the loan. In addition, you must meet HUD's other financial assessment guidelines which might require you to take a set aside account for the payment of taxes and insurance on your home.

Hi Donna, Does your mom keep her monthly statements? Those should show every time they advanced any funds on her behalf in addition to any correspondence, they sent her regarding the non-payment of taxes. The lender cannot remove your mom from the home in a matter of days, that would take a foreclosure action (possibly in a court depending on where the property is located), and a court order, requiring lengthy notification steps that take months before the lender ever reaches a point of eviction. If you feel that your mom never received any of those notices, you should retain counsel immediately to protect her rights. If she was not properly notified, the attorney can stop the process before it is too late. I cannot tell what was or what not done based on just the information you have given me here, but I honestly believe you are going to find that mom has been receiving numerous notices about the non-payment of taxes. My experience has been that the lender will begin notifying borrowers immediately when taxes are not paid, and they will only start advancing funds when they are seriously delinquent (at which time they typically send additional notices to the borrower). Each monthly statement from that time forward will indicate the amounts advanced on behalf of the borrower and state laws require certain notices be given and the timeframes for those notices before a foreclosure may proceed. This is not a new issue if it has already gotten to the point of eviction. If you feel that an attorney is not within mom's financial grasp, then do not delay and check to see if there is a free legal aid office near her that can assist. If they are trying to evict her, it sounds like the property has already gone through foreclosure and I do not know what can be done but I do know there is no time to delay.

Hi Linda, A bankruptcy does not automatically eliminate you from being able to receive a reverse mortgage and by the same token, if you file for bankruptcy once you have a reverse mortgage, there will be implications on your ability to use the line until certain conditions are met. If you plan to file a bankruptcy, you should check your specific circumstances to see how you will be affected before making any assumptions based on general information.

Hi James-A borrower currently in the process of Chapter 13 bankruptcy can still get a reverse mortgage, but only if they have been on a minimum of 12 months payment schedule and have met all their obligations in a timely manner as required by the court.