My Mother did a reverse mortgage on her home, what I didn't realize was that my name is on the home as owner also, and I didn't sign anything for the reverse mortgage. I thought that the youngest owner had to be 62, and I am just 51.
Expert Answer by Barbara Steinberg
I don’t know how this could happen.
In order to take out an FHA-insured HECM loan (Home Equity Conversion Mortgage, the most common kind of reverse mortgage) the youngest borrower must be at least 62. The lender requires all owners to sign the mortgage application and note, and in fact, the age of the homeowners is critical in determining the amount of the loan. The older you are, the more you can borrow.
Before a reverse mortgage can be obtained, a full title search is always done on the home. If your name is on the title or deed, you will be listed as an owner. Perhaps the deed with your name on it was never recorded? I suggest you check the public records for your municipality to see how the deed is recorded. If your name appears, contact an attorney or the title company to have your name removed.
Answer
Great answer Barbara,
Yeah, usually the requirement is that the youngest borrower must be at least 62. It is uncommon, but not impossible.
I work for an in-home/aging in place blog and we are currently writing a series on paying for eldercare. Our latest article is on financing reverse mortgages. If you are interested in learning more, check out http://www.rightathome.net/seniorhomecare.
Good question.
Answer
Additionally, if this house is your primary residence, you should have had to sign a "homestead" rights waiver of some sort, depending on the state you reside in. Basically, it is an agreement with the bank that, as an owner residing at the property, you agree not block forclosure or eviction proceedings should they become necessary to collect the debt. Sounds like the lender really dropped the ball on this one. If you do not agree to the reverse mortgage, it is possible that you can use these oversights to cancel the contract.
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