Nearly 1 Million Older Homeowners Face Foreclosure


Nearly 1 Million 65+ homeowners at risk of foreclosure

It’s not a headline you’ll see in the national media. Over 900,000 homeowners 65 and older could be at risk of foreclosure. While evening news stories recount the struggles of millions of homeowners across all ages the CFPB looked closely at their mortgage data and more specifically which age groups are struggling to make their monthly mortgage payment.

The bureau’s latest data reveals some disturbing numbers. As of July 2021 about 682,400…

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3 comments

Dan Hultquist August 23, 2021 at 5:11 am

The most effective form of consumer protection is AWARENESS. Thank you, Shannon and HECM World, for this critical message. It’s not the CFPB’s job to promote reverse mortgages. It’s our job to make sure everyone knows the HECM product is the aging-in-place solution for older Americans.

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Shannon Hicks August 23, 2021 at 7:18 am

Thank you Dan!

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Don Opeka August 23, 2021 at 1:04 pm

My book “Why a Reverse Mortgage?” tells specific stories of how people in this group have been helped. I also have specific stories of people being forced from their home because they waited too long to get a Reverse Mortgage. Any Reverse Mortgage originator can get a loan done if the borrower contacts them when the first payment is about to be made late. It’s hard to help when the call comes a few days before the foreclosure sale date.

Few people understand that they can make optional payments on a Reverse Mortgage just like on a forward mortgage. If the Reverse Mortgage is in place when a crisis like Covid hits, the borrower can stop making payments, schedule monthly payments to the borrower, or take draws from the line of credit to get through the crisis, and then return to making payments when the crisis ends.

Unfortunately, FHA rules make it difficult to help some people. One example is a prospect who did a rate and term refinance in January 2021 to lower his payments because his business was slowing rapidly. Later this year, he realized a Reverse Mortgage would be helpful, but his refinance into a Reverse Mortgage was blocked because he received $900 cash back on the rate and term refinance. His business has gone to $0. His Social Security income is adequate to qualify for a HECM. A Reverse Mortgage would help. FHA doesn’t think he should be allowed to get a HECM within a year of the prior rate and term refinance. It’s an obvious case of FHA rules preventing a responsible borrower from being helped by a HECM.

If this borrower had taken time to understand his options, he could have had a HECM in place long before the Covid crisis. He could have been making payments on the HECM before the crisis. When the crisis hit, he could have stopped making payments or drawn on the line of credit. When business resumes, he could have returned to paying down the loan. He would not need forbearance any other government assistance.

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