Comments on: HUD Reverse Mortgage Foreclosures: Will They or Won’t They?

By: Anonymous

Anonymous — Wed, 24 Mar 2010 14:20:00 +0000

It has been 4 or 5 years, when I worked with a client in Alexandria, Va. the city of Alexandria allowed for a deferral and subordinated to the reverse. rnrnLooking at their web site now, they allow for full exemption, 50%exemption, 25%exemption or a deferral based on income. The solution involves state and local governments realizing there is a net positive in aging in place and therefore allowing for an exemption or deferral. rn

By: reversemaniac

reversemaniac — Wed, 24 Mar 2010 13:39:00 +0000

It is my understanding that tax deferral programs are only allowed for borrowers in California, Oregon and Massachusetts – as they take a subordinate lien position. All other states take a 1st lien position on deferral programs, so they are not allowed under HECM regs.rn

By: oldtimer2

oldtimer2 — Wed, 24 Mar 2010 12:20:35 +0000

It has been 4 or 5 years, when I worked with a client in Alexandria, Va. the city of Alexandria allowed for a deferral and subordinated to the reverse.

Looking at their web site now, they allow for full exemption, 50%exemption, 25%exemption or a deferral based on income. The solution involves state and local governments realizing there is a net positive in aging in place and therefore allowing for an exemption or deferral.

By: reversemaniac

reversemaniac — Wed, 24 Mar 2010 11:39:11 +0000

By: timlinger

timlinger — Tue, 23 Mar 2010 23:23:48 +0000

As I understand it FHA does NOT allow the “Property Tax Deferral Program” to be used with a HECM. I also believe that MOST states DO have the PTDP for seniors.

By: jsmaldone

jsmaldone — Tue, 23 Mar 2010 21:22:15 +0000

This problem will exist forever and a day. Their is no simple solution.

In some cases where the borrower has a line of credit, the T&I can be taken out to pay a particular years worth. When that occurs, serious counseling must be done with the borrower to try and avoid future occurrences of this nature. Those who have no reserves to go to and can't pay their taxes and insurance are in deep trouble.

However, some states do have a senior aid program and tax relief program that a senior can resort to. Some seniors will have to be foreclosed on. Unless a hardship appropriation bill would be passed specifically for seniors to either partially fund or fully fund the T&I for those that would qualify as a hardship case.

The Critic is right and others who have commented on this issue made valid points. The plain old facts are, this is a problem that will not be fixed any time soon. We can only emphasize to the senior how important it is for them to budget monthly and set aside the money for their taxes and insurance when it comes due. I think we have to be good councilors and drive this issue home to the borrower.

John A. Smaldone

By: The_Critic

The_Critic — Tue, 23 Mar 2010 21:03:36 +0000

Thank you!

By: hecmadvocate

hecmadvocate — Tue, 23 Mar 2010 19:06:47 +0000

In Oregon seniors can participate in the Senior Property Tax Deferral Program. This allows the State to pay the taxes to the Co. and place a lien on the property that gets repaid (with 6% simple interest) when the home sells or refinances in the future. Why can't this be done in all states?