Too many seniors are caught in the “amount due greater than the value of the home” squeeze. In that scenario, the reverse mortgage will not work.

We have found some debt that can be subordinated in such cases but the work to determine it and get that done is horrendous. This works where the value is still greater the total amounts due from debts and liens. Usually with most mortgages, they have been sold to investors with the covenant that the underlying debt will not be subordinated.

Sometimes lenders will take the net proceeds from a reverse mortgage as payment in full but that is rare. Sometimes the homeowners have the cash needed to pay down the debt enough to where that amount of cash plus the net proceeds from a reverse mortgage are sufficient for the lender to wipe the remaining debt off of the books of the existing lender.

Both exercises are extremely rewarding but are quite difficult and time consuming. Working with another individual who can charge for the time it takes to get the cooperation of the existing lender can be financially rewarding as well.