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Reverse mortgage question

Date: Mon, 03/16/2009 - 19:06
Submitted by on Mon, 03/16/2009 - 19:06
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My mom has accrued significant debt due tot he failure of her business. She has about 130K in unsecured credit card debt that she is personally liable for. My parents have a house that appraises at 625K but hasn't sold after being listed for 550K for several months now. The house has 340K in mortgages.

She was considering bankruptcy for a while. She was hopeful she could sell the house and negotiate the debt with the proceeds and still keep a chunk of the money for my folks to buy a downsized home.

Since the house hasn't sold she is worried that she will get sued by the credit card companies and they will put a lien on the house.

Her new plan is to get a reverse mortgage. She says she can get a reverse mortgage that will give her 30K in a line of credit in case of emergency and reduce their monthly payment from about 2400K/mnth to about 1100K/mnth. She wants to pay the interest on the thing for a couple of years and then hopefully they can sell it if the market improves.

They are both about 70 and the house is their only asset. Between retirement and social security they bring in about 5K/mnth. If one were to pass the other would get about half that.

I worry that the interest will eat up any equity and that the rates will go up dramatically once the inevitable inflation that follows large governement debt kicks in.

What says the group: Is this a good plan or shoudl they just declare bankruptcy?

Thanks to all who consider this and offer their thoughts!


can you include creditor judgments in a bankruptsy


Submitted by on Sat, 05/09/2009 - 13:58

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I have a home and i have my name on it and my 90 year old mothers name is on it , she has a 30,000 dollar credit card debt , can they put a lien for her half of the home , we currently rent it out . and if she passes away does that debt die also , that is the only assest that she has in her name . :?:


Submitted by on Tue, 05/26/2009 - 07:17

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Is that a definite , because I always heard that they can not take half of a home , I worked a deal out with them , i am paying the debt , 250.00 a month with 1000.00 down , if i keep paying and when the day comes that my mom passes and i want to sell , will they go after the remaning money , or should i not pay them anything and just keep renting the home .


Submitted by on Tue, 05/26/2009 - 11:07

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They can't take half the house. They can only force the house to sell and the debt would be paid in the funds. This rarely happens. And I mean rarely.

They can put a lien on the house for the debt because your mother's name is on the deed as well.

I work in the mortgage industry so yes, this is a definate. I deal with it everyday.

I guess I should put it this way, if they have filed for a judgement then they can put a lien on the house. If a judgement has been awarded then they can't put a lien on the house. As long as you are paying them monthly then there is no reason for them to place a judgement against her.


Submitted by sassy_lil_brandy on Tue, 05/26/2009 - 11:48

sassy_lil_brandy

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