www.lasvegasmtg.com Report: Fannie Mae want Servicers to start Foreclosure on Reverse Mortgages
www.lasvegasmtg.com Report: Fannie Mae wants Servicer to start Foreclosure on Reverse Mortgages that are in default of Taxes and Home Owners Insurance. What was once taboo to discuss that any Senior could lose their house with a Reverse Mortgage loan is now going to be more likely to occur. HUD has always had rules in place that Taxes and Home Owners Insurance is cause for Foreclosures, but little action by the Servicer of the Reverse Mortgage Loan to correct the deficiencies due to the fear of being "Tarred and Feathered" by the press. Fannie Mae had encouraged this practice of not pursuing the foreclosure process in the past with the Servicer when taxes and home owners insurance was delinquent, but with the rising number of defaults on taxes this policy has been reversed.
Servicer are now going to be required to submit the troubled Reverse Mortgage Loans that are delinquent on taxes or home owners insurance to HUD to get approval to start the Foreclosure process. The Seniors will have six months to correct the deficiencies or the house will be foreclosed. The only time that will cause the Foreclosure to start immediately is when the Senior refuses to take action to resolve the deficiencies.
Fannie Mae and Servicer are waiting for the promised Mortgagee Letter from HUD outline the procedures and remedies for Taxes and Insurance delinquencies on Reverse Mortgage Loans. This action has been prompted due to the higher number of delinquent taxes and home owners insurance with estimated as high as 2% of all Reverse Mortgages in Default.
Within the Reverse Mortgage industry there is no loss mitigation departments and with tax lien sales on the rise HUD and Fannie Mae needs to find a solution that protects the Lenders as well as the Seniors.
Seniors have lost 40% to 50% of their retirement funds since 2008 and 40% to 50% of their home values. They have not received a COLA increase this year on their Social Security payments. Seniors are the first to see a loss of part time income with either less hours or lost jobs due to the high unemployment rates. Seniors typically lose 50% or more income with the death of a spouse, higher cost for medical and basic necessities have all contributed to troubling times for Seniors with Reverse Mortgage.
Seniors belief in paying their bills and those that cannot pay their taxes or home insurance because of extenuating circumstance need to get help to stop Foreclosure procedures taking their home away from them and quite possibly the very life.
With 11.4% of the population 65 and over in Las Vegas, Nevada we will see the next wave of foreclosures come from Seniors in Reverse Mortgages with Delinquent Taxes and Home Owners Insurance that they are unable to pay.