The Federal Housing Administration (FHA), which oversees the nation’s most popular reverse mortgage program, has significantly changed the way it will handle reverse mortgages for “non-borrowing spouses” for the second time in 90 days.
Reverse mortgages are available to individuals 62 years of age or older, who own their home. The amount of tax-free funds received is based on the owner’s age, current interest rates and a current home appraisal. However, a major issue has involved surviving spouses. In the past, many surviving spouses were left out of the loan documentation because they were too young to qualify when the reverse mortgage was signed.
This left the surviving spouse at the risk of foreclosure or having to immediately move out of the home they shared with their loved one. The FHA’s recent decision will allow surviving spouses to remain in the home and avoid displacement during their lifetime. The ruling specifically pertains to households with reverse mortgages written before Aug. 4, 2014.
FHA guidelines indicate that the lender can assign the reverse mortgage to the U.S. Department of Housing and Urban Development (HUD) under the Mortgagee Optional Election (MOE). In April, the FHA rescinded the MOE and updated it this past June. The amended MOE will allow HUD to eliminate lawsuits brought by non-borrowing spouses.
Surviving spouses will enter what is referred to as an unlimited deferment period where they may remain in their home. Non-borrowing spouses will be required to be added or remain on the title, 90 days after the reverse mortgage becomes due. They also must continue payment of property taxes and insurance, and be married at the time the spouse passed away.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
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