REVERSE MORTGAGES AND BANKRUPTCY IN FT. LAUDERDALE, WEST PALM BEACH, AND MIAMI
1. WHAT IS A REVERSE MORTGAGE?
This is a mortgage loan available to qualified borrowers that are over 62 years of age. Normally the underwriting is based solely upon the borrower’s equity in the residence securing the loan.
Reverse mortgages typically do not have to be paid off until the borrower: moves to a new residence; sells the home; or dies.
2. A NEW DANGER WITH REVERSE MORTGAGES
Although borrowers are not required to make monthly mortgage payments, they are required to pay the real estate taxes, and homeowners insurance premiums.
Until recently the failure to pay the taxes and premiums did not result in the bank declaring default and filing foreclosure. Banks advanced these payments and added those sums to the total debt, to be paid upon death, or sale of the property.
This has changed. Now, banks that do not file foreclosure due to the borrowers default in payment of taxes and insurance premiums are not in compliance with federal guidelines, and the FHA refuses to insure these mortgages. Consequently, senior citizens that are unable to pay the taxes and premiums may find their residence in foreclosure, and in danger of losing their homes.
3. CHAPTER 13 BANKRUPTCY TO CURE REVERSE MORTGAGE DEFAULTS
Just as we file Chapter 13 Bankruptcy Cases to enable borrowers to catch up on their mortgage payments on traditional mortgages, we can file Chapter 13 to stop foreclosure and build in time to satisfy the unpaid taxes and insurance premiums. We can file Chapter 13 Bankruptcy for you, stop foreclosure, and buy you up to five years to pay the unpaid taxes and premiums in the Chapter 13 Plan.
Contact Law Offices Of Todd S. Frankenthal (with offices in Ft. Lauderdale, Florida and Boca Raton, Florida) to discuss filing bankruptcy to save your home from a reverse mortgage foreclosure.