Finding A Mortgage Structure That Works: Reverse Mortgage Types

Though not right for everyone, there are many senior homeowners that can benefit from a reverse mortgage, especially those that have lost substantial amounts of money in the recent financial crisis.

Reverse mortgages come in three kinds: single-purpose loans, home-equity conversion mortgages, and private reverse mortgage.

Single-purpose loans-those offered by state and local government agencies and nonprofit organizations, is by far the most common reverse mortgage type. They are granted to seniors for the purpose of lifestyle maintenance, home improvements, and other major expenses. Single-purpose loans are typically a lower cost option compared to HECM’s and private reverse mortgages
HECMs are sponsored by the Department of Housing and Urban Development and can be used for any purpose that the borrower wishes. One of the best things about a reverse mortgage is that there are no health, income, or medical restrictions to qualify. The only qualifications are that you be 62 years of age or older, in addition to either completely owning your home or have a current mortgage loan balance that is low and can be paid off with proceeds from the loan.

Private reverse mortgages are loans that are developed and backed by private lenders, not the government. If considering a reverse mortgage from a private lender, it is important to carefully scrutinize the mortgage contract and terms, as many of the lenders who previously sold subprime loans now sell reverse mortgages. However, there are still a lot of trustworthy and reliable lenders available, and with a good credit rating and a substantial amount of equity, you will be able to qualify for the best terms.

Do remember that regardless of type, your reverse mortgage will become fully due if you decide to move. Also keep in mind that there are high upfront fees and charges that borrowers usually incur with reverse mortgages. It would be wise to not borrow the full amount of your home’s equity if you plan to move in the future or want to leave your home to your heirs.

As with any type of loan, if you are thinking of taking out a reverse mortgage, be sure to speak with a financial counselor to discuss goals and qualifications.

The art of war loan modification style

Due to the current recession, you might be one of the many who is in the danger of losing your home! If you do not fight hard, and fight now, you will lose almost everything. Never forget that this is a kind of a war where you have to fight for your rights.

Grab your armor and weapons and start training for the fight of your life. You are getting set for a battle with one of the toughest and most powerful opponents in the world. Big money banks, lenders and investors!

Banks are some of the oldest and most powerful institutions in the world. They have had hundreds of years of practice, influencing political parties and economic systems the world over.

In order to win, you must not forget that you are in the fight of your life. Any good fighter will tell you that when you plan to fight with an opponent, you must first analyze the strength and weaknesses.

Be aware of your lenders strengths:
  1. A lien on your property in the form of a mortgage.
  2. The right to take your home in foreclosure to satisfy the lien
  3. The law is currently on their side
  4. A loss mitigation system designed to discourage you.
  5. A negotiation process geared towards getting naïve homeowners to accept an arrangement not in your best interest.

Apart of the strengths, your lender has certain weaknesses as well:

  1. Prospect of foreclosure in a down market with few buyers.
  2. Costs of foreclosures.
  3. Depreciating assets REO properties.
  4. Liability of carrying properties
  5. Tied up capital and reserves for bad loans
  6. Possible errors in loan documents
  7. Possible violations in loan documents
  8. Incorrect interest calculations in ARM rates
  9. Court cases that can cause PR problems, costly litigation, and possible creation of legal classes.

Suffice it to say, lenders have plenty of things to fear in this market when it comes to trying to recover their losses. In most cases, if the matters are on the verge of going to the court, 95% of the lawsuits are settled and never reach trial. Banks know this better than anyone, and they don’t want to have to face the prospect of lawsuits from borrowers that they have wronged.
Over the years, lenders have gotten fat and little lazy in their training habits and fighting tactics. Knocking homeowner, after homeowner out in foreclosure. Winning fight after fight.

Their cocking and arrogance have put them in a bad position. This is just plain stupid because the banks have made many mistakes in the laws which they tend to manipulate with their major contributions of campaign money.

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