Reverse Mortgage Funding, LLC, Foreclosure Defense in Florida – Loan Lawyers

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Reverse Mortgage Funding (RMF) was established in 2012 and since that time, the company has become one of the biggest issuers of reverse mortgages in the United States. They are a recognized industry leader and focus on originating, investing in, acquiring, and managing reverse mortgage loans and the securities backed by them. RMF states on their website that they are dedicated to making reverse mortgages better, but that is not always the case. At times, they improperly foreclose on homeowners, or their heirs.

Foreclosure on a reverse mortgage is just as devastating as a foreclosure on a traditional loan. Below, our Florida foreclosure defense lawyer explains more about these loans, and how you can avoid a foreclosure.

Reverse Mortgages vs. Traditional Mortgages

Traditional mortgages, also sometimes referred to as forward mortgages, borrowers qualify for a home loan based on their creditworthiness, employment history, and income. Lenders, which usually take the forms of banks, provide borrowers with a large sum of money to buy a home or piece of real estate. A borrower is then responsible for repaying the mortgage with monthly installment payments. If a borrower defaults on these payments, the lender will start the foreclosure process.

On the other hand, reverse mortgages are entirely different. These loans are meant for borrowers that already own their home outright. Usually, these individuals have spent decades paying off their mortgage. Homeowners do not always have to own their home fully if they have enough equity in their property to qualify for a reverse mortgage. Only people who are 62 years of age or older and who use their home as their primary residence qualify for reverse mortgages.

The Federal Housing Administration (FHA) runs a program known as the Home Equity Conversion Mortgages (HECM). The program insures almost every reverse mortgage in the United States, guaranteeing that lenders will receive their payment in full if the homeowner ever defaults on the loan.

The main difference between traditional loans and reverse mortgages is that with the latter, homeowners do not pay anything while they still live in the home. Instead, the lender provides a homeowner with a lump sum, installment payments, or a line of credit the homeowner can use. Although this sounds like a great arrangement for homeowners, reverse mortgages pose many risks. They can also result in a borrower losing the home they have worked for their entire life.

Triggering Events with Reverse Mortgages

Lenders promote reverse mortgages to homeowners by telling them they do not make any payments unless they move out of their homes or pass away. Still, many things can give the lender the right to foreclose, and these are known as triggering events. Triggering events can force homeowners to repay the entire amount of the loan, plus interest. If homeowners do not have the funds to cover this, which they often do not, the lender can foreclose on the property.

The death of the borrower is the most common triggering event. Most people understand that if they pass away, the entire loan becomes payable. The heirs can choose to keep the property by repaying the loan, often at a lower amount than what was originally borrowed. Heirs also have a right to sell the home and use the proceeds to repay the reverse mortgage. If the heirs do not like either of these options, they can allow the lender to foreclose and forfeit the property.

Another triggering event occurs when the home is sold or transferred. Selling or transferring the home can also trigger a reverse mortgage foreclosure.  If the borrower sells the home, even to a relative, the loan becomes payable in full. When a property is sold with a reverse mortgage on it, the escrow company usually pays off the loan with the proceeds from the sale.

If a homeowner does not use the home as their primary residence, that can also trigger a reverse mortgage foreclosure. If there are multiple borrowers in the home and only one leaves, it may not trigger a foreclosure. Reverse mortgages require borrowers to remain in the property. If a borrower wants to leave the property, they can sell it and use the proceeds to repay the reverse mortgage or agree to a deed-in-lieu of foreclosure. If none of these arrangements are made, the lender can proceed with foreclosure.

Lastly, as with a conventional mortgage, if a borrower fails to comply with certain terms of the reverse mortgage, it can result in foreclosure. These terms can include requiring the homeowner to stay current with property taxes, maintenance of the property, and homeowners’ insurance. Failing to comply with these terms can trigger a reverse mortgage foreclosure.

How to Avoid a Reverse Mortgage Foreclosure

You never want to learn that the home you have worked your whole life for is at risk and that the lender may foreclose. Fortunately, there are things you can do to avoid a reverse mortgage foreclosure. These are as follows:

  • Keep all correspondence from your lender. If you are unclear about any language or wording in any documents sent, speak to a lawyer who can review the paperwork and explain it to you.
  • Promptly respond to any communication your lender sends you.
  • If a company is servicing your reverse mortgage, keep current with the company. Mortgage servicers can change many times and the current company may not be Reverse Mortgage Funding, LLC, or any other original lender you obtained the loan from.

Our Reverse Mortgage Foreclosure Defense Lawyers in Florida Can Outline Your Options

Whether you can keep your home or other options can help you avoid foreclosure, our Fort Lauderdale foreclosure defense lawyers can help. At Loan Lawyers, we have the necessary experience with reverse mortgages, how they work, and how to defend against foreclosure cases. We will put our expertise to work for you. Call us today at (954) 523-4357 or fill out our online form to schedule a free review of your case and to get more information.

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matis and matthew

Loan Lawyers is made up of experienced consumer rights attorneys who use every available resource to develop comprehensive debt solution strategies. Our goal is to take on those burdens, resolve those problems, and allow our clients to sleep soundly knowing they are on the path to a better future.

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