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FOR
IMMEDIATE RELEASE:
CONTACT: STEVE DUBIN, PR WORKS, (781) 582-1061,
SDubin@PRWorkZone.com
Using a reverse mortgage to avoid foreclosure.
George Downey of Harbor Mortgage Solutions
outlines reverse mortgage criteria for senior
homeowners.
DATELINE: BRAINTREE, MA…
The
staggering rise in foreclosures nationwide has
also had an adverse impact on senior homeowners
who may have refinanced an existing mortgage,
lured by the low “teaser” rates of adjustable
rate mortgages. The prospect of lower interest
rates and lower monthly payments in many cases
has now burgeoned into dramatically higher
monthly mortgage payments after the initial 2 or
3-year period of low interest rates has passed.
Can a reverse mortgage help
senior homeowners avoid foreclosure?
George
Downey, the Founder of Harbor Mortgage
Solutions, Inc. in Braintree, MA, offers an
outline of some basic criteria of a reverse
mortgage that might help a senior homeowner
avoid foreclosure. Downey, an expert on reverse
mortgages, is also a past Board Chairman of the
Massachusetts Mortgage Association.
It’s
easier than it might seem for a senior homeowner
to fall behind in their mortgage payments. A
variety of unforeseen events can wreak havoc on
a senior homeowner’s ability to keep up mortgage
payments, particularly when they rely on a
limited fixed income. Unexpected medical
expenses, death, divorce, loss of a job,
increased taxes— all of theses factors can upset
the fragile budget-balancing act required to
make it through the end of the month and pay
bills on time.
If a
homeowner does fall behind in their existing
mortgage payments for any reason, the best
course of action is to contact their lender
before foreclosure is imminent to see if a
repayment schedule can be worked out. If a
senior homeowner (or the youngest spouse in the
case of couples) is over the age of 62 and has a
mortgage that is relatively low in relation to
the appraised value of the property (meaning
that you have a significant amount of equity to
tap into), it may be feasible to investigate the
use of a reverse mortgage to avoid foreclosure,
particularly if no other resources are
available. Unlike a home equity loan, there are
no monthly payment obligations with a reverse
mortgage.
There
have been many cases where a reverse mortgage
has literally saved the day, rescuing a senior’s
home from foreclosure. Since the terms of a
reverse mortgage require that any preexisting
mortgages be paid off before the proceeds of the
reverse mortgage become available, the lender
that is threatening foreclosure is paid first.
Any subsequent liens or debts can also be
settled from the proceeds of the reverse
mortgage, with no stipulations on the use of the
remaining cash. Even if there is a minimal
amount of cash left after paying off the primary
lender, foreclosure is avoided, no monthly
payments are required, and as long as the senior
borrower continues to live in the property, the
loan can never be called.
With no financial or credit
qualifications to meet, no monthly payments
obligations, and no restrictions on the use of
the cash, reverse mortgages are rapidly becoming
a new and vital source of cash for today’s
seniors. Consultation with family members, a
trusted financial advisor or elder law attorney,
and a competent reverse mortgage consultant are
a must for senior homeowners to educate
themselves about the various options available
and to determine if a reverse mortgage would be
suitable solution for their particular needs and
circumstance.
The
Reverse of Traditional Thinking
A
reverse mortgage, essentially the opposite of a
traditional or “forward” mortgage, can enable
seniors to tap into accumulated equity without
having to face ongoing payments. Unlike
traditional mortgages where borrowers make
monthly payments, in a reverse mortgage the cash
flow is reversed, and the lender makes payments
to the borrower, enabling borrowers to use the
tax free cash they receive in any way that they
wish.
There are no minimum
income, asset, or credit qualifications to meet
and no effect on Social Security or Medicare
benefits. The property must be the primary
residence of the borrower and properly insured
and maintained, with real estate taxes kept
current. As long as the borrower continues to
live in the property the loan can never be
called. Repayment is required if the home is
sold, or when the last borrower permanently
leaves the property, or passes away. At that
time, the heirs can sell, or refinance, the
property to pay off the loan.
Once
the province of a few small banks and private
lenders, the great majority of reverse mortgages
today are provided through government-sponsored
programs, namely the HUD/FHA Home Equity
Conversion Mortgage (HECM) and the Fannie Mae
Home Keeper (HK) programs.
Customized Harbor Mortgage Solutions
Specializing in conventional residential and
reverse mortgages, Harbor Mortgage Solutions,
Inc. is located at 100 Grandview Road, Suite 105
in Braintree, MA. George A. Downey, who is now
joined by his son Christopher Downey, founded
family owned and operated Harbor Mortgage
Solutions in 1978.
Assisted by a staff of experienced mortgage
professionals, Harbor Mortgage Solutions is
dedicated to providing customized service,
obtaining the best possible solution for each
individual client every time. An equal
opportunity lender licensed in Massachusetts
(license #MC0041) and Rhode Island (license
#20041821LB), Harbor Mortgage Solutions is a
member of the Massachusetts Mortgage
Association, the National Association of
Mortgage Brokers, and the National Reverse
Mortgage Lenders Association, strictly
subscribing to their rigid code of ethics.
Harbor Mortgage Solutions is also an Educational
Subscriber of the Massachusetts Chapter of the
National Association of Elder Law Attorneys.
For additional
information on services offered by Harbor
Mortgage Solutions please call 781-843-5553
or 800-599-8700, or visit
www.HarborMortgage.com.
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