Can a reverse mortgage be done after a property has been in foreclosure and sold to a back to a bank?

Asked by Raina, Chicago, IL Tue Nov 6, 2007

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11
Carrie, Both Buyer And Seller, Say Cheese!
Tue Nov 20, 2007
Here's a link below with a good, clear discussion of reverse mortgages.

The reverse mortagage has to be the primary lien/loan. So the whole house has to be paid in full, including any liens. An insured loan is only made to owner/occupiers that are 62y or older until they sell, die, or move out. Then all the loaned money has to be paid back. The details are at the site below.
1 vote
Greg Zaccagni, , Illinois
Tue Nov 20, 2007
Reverse mortgages require substantial equity to qualify. Generally at least 75%. Think of them as home equity lines you don't make payments on - till you or your heirs sell the property. Owner(s) must also be over 62. You can learn more about these programs visiting my blog on this subject on the "shopping around" page of my website. Greg Z
1 vote
Santiago Ken…, Agent, Chicago, IL
Sun May 12, 2013
You need to talk with an attorney
0 votes
Terri Brady, , Chicago, IL
Fri Mar 22, 2013
There are many changes with reverse mortgages in the last couple years but the short answer is that if the funds are available then a reverse mortgage can be used to buy a new home or pay off a current mortgage on an existing home, even if in foreclosure. I am a reverse mortgage agent and would be happy to discuss.
773-327-3580
0 votes
JJones.Banker, , Oswego, IL
Mon Mar 18, 2013
Many of these answers are completely wrong.

A reverse mortgage DOES NOT require that the existing property be mortgage free.
A reverse mortgage can be used to purchase a new or existing home including a foreclosure or a short sale.
A reverse mortgage DOES NOT require 75% equity.
A reverse mortgage has NO minimum credit score or income requirements.

As evidenced by many of these answers a reverse mortgage does require the buyer to work with someone that actually has experience, knowledge, complete and accurate understanding of how they work and why they exist.

Find yourself a Certified Mortgage Planning Specialist to work with.
0 votes
Greg Zaccagni, , Illinois
Sat Dec 1, 2007
I went to the AARP website and did not find any statement that the current mortgage need be paid in full to qualify. AARP is not a lender and does not underwrite or fund mortgage loans. I am not the kinda guy that needs to build myself up by pointing out mistatements of others but this issue is more important than any individual ego.

Their are may types of Home Equity Conversion Mortages (HECM's) to choose from and I believe it is important that you (and others) don't disqualify yourselves from a program that potentially enables you to live in your own home for the remainder of your life without worrying about mortgage payments just because you may still have a small remaining loan balance.

Especially with the holidays upon us, it pains me to think of elderly individuals being forced to make decisions about selling their homes and the lifetime of memories they have because of their current mortgage payments.
0 votes
JonTheBanker, , Chicago, IL
Fri Nov 30, 2007
The short answer is no. Reverse mortgages are REFINANCE ONLY, never purchase money.
0 votes
Carrie, Both Buyer And Seller, Say Cheese!
Tue Nov 20, 2007
Ruth,

My father found out he couldn't take it with him, so he decided not to go.
0 votes
Ruthless, , 60558
Tue Nov 20, 2007
Are you saying that your house was foreclosed? Or are you saying that you want to buy a foreclosure? A reverse mortgage is for someone who owns a house free and clear. For example, if you live in a home that doesn't have any mortgage payments and you are owner, then you give your home as collateral to the mortgage company and they send you a monthly check. After several years, you would then have to sell the house for more than is owned on the home.

I hope this explains things a little better. The idea of a reverse mortgage is for senior citizens who spent 30 year paying off their homes and now need money after retirement. They figure, "You can't take it with you" and they will probably die before they exhaust the equity in the home.
Ruth
0 votes
Debt Free Da…, , 85260
Tue Nov 6, 2007
You can do a reverse mortgage on any property as long as it is paid off. As long as the bank doesn't own it anymore you should be fine.
Web Reference:  http://getprequalified.com
0 votes
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