Reverse Mortgages Can Help in Case of Foreclosures

In the year ended 2008, foreclosures were reported on 2.3 million American properties. This is an increase of 80% from the year 2007, and it also represents an increase of 225% from the year 2006. These findings were made by the RealtyTrac U.S. Foreclosure Market Report made out on January 15, 2009. The soaring numbers of foreclosures have sent waves through the banking and housing industries with millions feeling the effects.

According to the study, California, Florida and Arizona posted the highest foreclosure totals for 2008. California posted a total of 523,624 properties for foreclosure filing in 2008. This is the nation’s highest figure per state. Foreclosure activity in California went up by nearly 110 % from the year 2007. Also, this number represents an increase of nearly 498 % from the year 2006. Florida came in second nation-wide with 385,309 properties receiving a foreclosure filing in 2008. This represents an increase of 133% from the year 2007 and nearly 412% from the year 2006. Arizona came in third with 116,911 properties coming in for foreclosure filing. This number represents an increase of 203% from the year 2007 and 655% from the year 2006. Other states in the top 10 foreclosures bracket were as follows: Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.

Foreclosures and mortgage delinquencies are expected to continue to rise due to mounting job losses and a weak economy. The nation’s unemployment rate stood at 7.2 percent during December 2008 at its highest since the year 1993. Overall, the U.S. lost 2.6 million jobs for 2008.

Even with all the doom and gloom in the housing arena, there exists a ray of hope for senior homeowners 62 years of age or older. That hope arrives in the form of a HECM (Home Equity Conversion Mortgage) or Reverse Mortgage. As a senior home owner who has taken a reverse mortgage, you need not be concerned with increasing foreclosure rates and whether or not you will be able to meet your mortgage obligations. With a HECM reverse mortgage, monthly mortgage payments are not required at all.

Borrowers can remain in their homes for their lifetimes. They never have to worry about making a mortgage payment. They only need to keep the property in good repair, pay property taxes and maintain their homeowners insurance.

Now may be the time to explore the reverse mortgage option for seniors who currently do not have a reverse mortgage. It doesn’t matter even if the senior is a little behind on their mortgage payments, the senior may still qualify for reverse mortgage. To qualify, borrowers must be aged 62 or above, must be occupying the property as their place of primary residence and not currently be in bankruptcy.

The reverse mortgage money may be used by the senior home owner as he or she sees fit. The money can be obtained as a fixed monthly income or as a one-time payment which can be invested also. Seniors can continue enjoying occupancy of the same place of residence for as long as they live and do not have to pay mortgage payments again after taking the reverse mortgage. The lender will pay the senior!

So in these tough economic climates, seniors looking for a little breathing space in their tight financial budgets may consider opting for reverse mortgages on their properties.

2 Comments

  1. Kevin Simpson says:

    When you get this reversion, you really may have a chance to change the foreclosure situation. You have a chance to reorganize your finances and honor your debts

  2. Topdot Mortgage says:

    Reverse mortgages provide a great opportunity for seniors to buy a new home without having to worry about the monthly mortgage payments