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 have to 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? 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 for 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? One you can default on the reverse mortgage loan is if a borrower dies and the property is not the principal residence of at least one surviving borrower. The borrower is defined as the person who signs at the end of the Note. If the sole Note signor passes away and is survived by their spouse who signed the Mortgage but not the Note, the banks can use the passing as grounds for accelerating the loan and foreclosing on the home. The surviving spouse who signed the Mortgage is not considered as a co-borrower under current Florida law. In some cases, there are discrepancies between the individuals listed as the borrower on the Note and on the Mortgage. In those cases, Florida courts have ruled, “Our foreclosure precedent is clear that the mortgage must be read together with the note it secures and that, if the terms of the two documents conflict, the note prevails. See, e.g., Graham, 43 So. at 513-14; Krickl, 158 So. at 119.” WVMF Funding v. Palmero, 320 So. 3d 689, 694 (Fla. 2021).
Talk to Our Experienced Foreclosure Defense Attorneys in Fort Lauderdale, FL Today
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 foreclosure defense lawyer for a free consultation to see how we may be able to help you. Loan Lawyers has 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 Florida foreclosure defense lawyer a call today.
