Reverse Mortgage

Yes, the borrowers (homeowners) should share the blame because they were getting loans where they didn’t have the sufficient income to pay it back. This is the reason why people shouldn’t lie on their income information when investing into getting a mortgage or financing a car because it can hurt the lender and the borrower. They might be able to pay payments at first, but once the interest rate starts to increase, it can be difficult to make the payments because it might be higher that they intended to me. That’s when you start to have people file for foreclosure and end up filing for bankruptcy. The lender will also end up being hurt from it because they won’t anyone to pay off the debt and can ruin them financially. Especially when they have

The State of California has a mixed approach in that it is a lien theory and title theory state. According to lien theory "execution of a mortgage or a deed of trust only creates a lien against the property, it does not transfer title. The borrower retains full title to the property throughout the term of the loan and the lender simply has the right to foreclose the lien if the borrower defaults. California is a lien theory state in regards to mortgages but is a title theory state in regards to deeds of trust. According to title theory, the property is transferred but only as collateral with no possessory rights and is referred to as "legal title, bare title, or naked title." (Haupt, 2009, p.206) In either case, should the borrower default, they will lose the property.

Wells Fargo and other banks lend money to customers who wish to purchase or refinance homes. Once the transaction is complete, the customer owns the home, but the banks hold a lien position on the property’s title. If customers default on their mortgage payments, the banks begin the foreclosure process on the homes. When the foreclosure process is complete, the banks attempt to sell the homes at auction. If the banks are unable to sell the properties at auction, the homes are now bank-owned properties. Essentially,

The loan can be paid in one lump sum or with monthly payments. The loan doesn't have to be repaid as long as your loved one lives in the home. If they die or move, the loan will have to be repaid via monthly installments.

Although things may happen in the future, such as a medical crisis, that can impact the person's ability to repay the mortgage, this is true for anyone. Their focus now is on how much the person owes and if they are able to pay the bills they currently have on time before they add on a mortgage payment, repairs and maintenance of the home, homeowner association fees and more. A lot of responsibility comes with owning a home, and Mike and Brian work to ensure the borrower understands this responsibility.

6. Unable to sell the home: The borrower(s) may already recognize that they are in a situation that requires them to sell the home. One problem is the home has been on the market longer than the homeowner(s) can afford and there are no interested buyers. Another problem that could exist occurs when the property is worth less than the outstanding principal balance on the mortgage loan.

Ensure that the seller of the property is eligible to sell the property. For a private property that is mortgaged to a bank, if the seller has lost money on the sale, and is unable to top up the shortfall on his bank loan, the bank may not allow the seller to go through with the transaction.

A deal could be made for the individuals who’s homes have dropped in value so much that they see no incentive to stay. When GM and Chrysler were bailed out by the government, the government took a share of the stock as collateral, assuming that the worth of the company would go up and they would at least come out even. You can’t take out stock in a person, but you can apply the same concept. Assume a family has a home valued at eighty thousand dollars but the bank is owed a hundred twenty thousand on it and the family can’t make the payments. The bank would take a forty thousand dollar loss if the family walked, assuming the house would sell. If the bank offered the family to split the increased value of the house beyond the current value, then the family would have incentive to stay, and the bank wouldn’t be out forty thousand dollars. An alternative would be to let the bank have all of the excess equity over the value used to restructure the loan , up to the amount of original shortfall. The benefit to the borrower is lower payments and the ability to remain in the home (and still be part owner). This assumes the housing market will return and the value would go up. An example of this would be if the bank allows the mortgage to be rewritten for $80,000 and gets half interest in the equity over $80,000, limited to the $40,000 shortfall from the original loan. If the house sold for $110,000, then the bank

The fear of losing the equity in your house. Seniors grew up with the American dream of owning a house. They spent their lives focused on making their home free and clear of any liens. Paying off the mortgage was priority number one so it is counter-intuitive to add debt to it. By taking out a reverse mortgage you would be doing a 360 degree turn and actually be growing a mortgage versus paying it off. No matter how much sense a reverse mortgage may seem it will not make sense to a lot of seniors because of how they were financially raised.

Based upon the equity in your home, the lender makes a loan regardless of whether or not you can afford the monthly payments. If you are not able to make payments, you will then be at risk of losing your home through foreclosure. This type of practice slowly drains money from savings, removing the joys of homeownership which in the long run, leads to foreclosure.

Unfortunately, these banks have already approved so many loans that they have put so many people on the streets because they have lost their homes. Fixing the banking system now, although it will help people in the future, will not help the people who have already lost their homes and are living on the streets, homeless. Due to the economic recession, many Americans have lost their jobs and, as a result, cannot make their mortgage payments. When a house is foreclosed on, almost everyone involved loses money: the family loses their home and most of their possessions; for investors, loses range from 20-60 cents on the dollar; lenders typically lose $50,000 for each foreclosure (fdic.gov). Instead of immediately foreclosing on a home, the bank should look at the situation the family is put in: has there been a medical problem? Has one of the people bringing in income lost their job? If so, there should be a period of time granted to the household in which mortgage bills should stop. For example, if a father has lost his job, the wife doesn’t work, and they have young children, mortgage bills should stop until he has found work. Unless the family has saved up a lot of money and is able to make the payments with both parents out of work, there is no possible way they will be able to make the payments. Considering that the family has a mortgage, they probably haven’t saved up a lot of money to keep up with the

Mortgage lending is a major sector with the United States financial market today. “The modern mortgage has only been around since the 1930s, but the idea of a mortgage has been around for a lot longer.” (History of Mortgages, 2016) The literal meaning of the word ‘mortgage’ has Latin roots: ‘mort’ or death and ‘gage’ or pledge. Translated it supports “the idea that the pledge died once the loan was repaid, and also the idea that the property was ‘dead’ (or forfeit) if the loan wasn’t repaid.” (History of Mortgages, 2016) A mortgage is an agreement for the terms of your home loan, technically not the home loan itself. Real estate transactions require written documentation and this is the purpose of a mortgage.

Once the sale has been completed the mortgagee is rendered a trustee of the resulting proceeds [LPA s105]. He has a duty to pay firstly his costs; secondly to pay himself and other mortgagees sufficient to discharge the mortgage and finally to pay any

Analysis: But sometimes buying a house isn’t the best choice. It’s a long-term commitment that requires the homeowner to have a stable and secure job. If you default on your mortgage, for example being late on your payments or even missing payments the mortgage lender can take your home away. Then the lender can sell your home resulting as a foreclosure. Foreclosure also affects your credit making it harder or almost impossible to purchase a house in the future.

Repossession is a legal process in which a lender (generally the bank) takes back ownership of a property because a mortgage, or other loan taken against the property, hasn 't been paid. It 's generally used as a last resort if you, as the owner, cannot continue to fulfil your payment obligations, which will have been drawn up at the start of your loan agreement. Before repossession proceedings begin, it will be up to your mortgage lender to explore all other avenues available to help you repay your loan. If they cannot come to an agreement with you, they are free to begin repossession proceedings. When discussing repossessions it 's important to understand that, whilst when you take out a mortgage, you technically own your home, the mortgage lender will have a financial claim against it until you have paid off the agreed amount. Once the lender has repossessed your home it will almost certainly be sold on in order to recoup their lost costs. Note that only a court can decide is a lender has a leal right to repossess a home and