• John Smaldone

    This was a very interesting article. The financial assessment ruling forthcoming seems to be emerging to the surface because of the potential defaults of taxes & insurance. I am not saying that is the only reason but lets face it, this was the falling Ax that is causing this to eventually come to fruition.

    What I am about to say has not been shared by all but I still stand by my assessment of what I feel could fix the problem.

    First off, a majority of seniors live on a fixed income, they budget their money monthly not annually. I have suggested that setting up an escrow account could solve many problems of future defaults. Treat the loan like a traditional loan that has an escrow account set up.

    I go one step further, go back in time, establish an escrow account with 3 months of T&I and set up a coupon book for reverse mortgages. The coupon would be welcomed by seniors, they would clip their coupons each month and send in their payment.

    A senior can manage their money much easier on a monthly bases rather than facing the big tax bill and home owner insurance bill at the end of the year. Also from the servicer’s standpoint, if the senior borrower falls behind on a monthly escrow payment, it is a lot easier to mage a missing month or two rather than an entire year’s worth of taxes and insurance!

    I realize the servicing is an issue and servicer’s will have to set their systems up for it and it will create additional administration costs to service a loan. However, in the long run, it will prove to be beneficial to both borrower and lender/servicer!!!

    John A. Smaldone

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