Pitfalls to Avoid If You Have a Reverse Mortgage: Property Taxes and Property Insurance

Reverse mortgages are offered by Federal Housing Administration (FHA) approved lenders to people that are 62 years old or older who have equity in their homes. The homeowner and the property must meet all the requirements outlined by the lender to get approved for the reverse mortgage. Reverse mortgages allow homeowners to use some of the equity in the home to augment their income. For many seniors with equity in their homes who need supplementary income, reverse mortgages are a great way to support themselves as they approach or enter retirement.

What Is the Catch with a Reverse Mortgage?

Although there certainly are benefits for those who qualify for reverse mortgages, there are also several pitfalls that homeowners need to be aware of before they become reverse mortgage borrowers. There are quite a few ways that these reverse mortgage borrowers can end up involved as Defendants in a foreclosure lawsuit by defaulting on these reverse mortgages. Becoming a defendant in a foreclosure lawsuit puts these seniors at risk of losing the homes they worked hard for their entire lives.

What Are Some Ways That These Homeowners Expose Themselves to the Risk of a Foreclosure Lawsuit?

1. The borrower’s failure to pay all property charges, one of which includes property taxes is one of the hazards that should be avoided.
2. The borrower’s failure to pay all property charges, another of which includes property insurance is also a hazard that should be avoided.
3. The insurance for fire, flood, and hazard must be maintained in the amounts, to the extent, and for the period required by the lender.
4. The borrower also has to ensure improvements on the property whether they exist at the time the loan is issued or subsequent to the loan being issued.
5. The borrower also must provide evidence of payment of property charges to the lender. If the borrower fails to make these payments, the lender may pay whatever is necessary to protect the lender’s rights in the property including payment of taxes and/or insurance. The lender may also foreclose if the lender is forced to pay the property taxes and/or insurance because of the borrower’s failure to do so as this constitutes a breach of the terms of the mortgage.

If you or someone you know is contemplating the pros and cons of a reverse mortgage or already has a reverse mortgage, keep this in mind. If you find yourself in a situation where you are looking for a way to avoid foreclosure or a way out of foreclosure, contact our Fort Lauderdale bad-faith foreclosure defense lawyer for a free consultation to see how we may be able to help you.

Our Florida foreclosure defense lawyers have helped over 7,000 South Florida homeowners and consumers with their debt problems, we have saved over 3,000 homes from foreclosure, eliminated more than $100 million dollars in mortgage principal and consumer debt, and recovered over $25 million dollars on behalf of our clients due to bank, loan servicer, and debt collector violations. Give our Fort Lauderdale foreclosure defense lawyers a call today.