Reverse Mortgage Foreclosure

6 Replies

Can someone explain to me the difference between a regular foreclosure and a reverse mortgage foreclosure? My real estate agent was only able to tell me that reverse mortgage foreclosure has a kick out clause where they can back out of a deal and it can be a waste of your time. Can anyone bought a property that was a reverse mortgage foreclosure and what was your experience?
Thanks. Have you even bought a reverse mortgage foreclosure? Did you it find it now difficult to deal with than a regular foreclosure? Jeremy Pace

@Keishee Hill

I've never bought a reverse foreclosure, but I have purchased a foreclosure ... the one thing I can tell you is that you need to be in constant contact with them to make sure that you know exactly what they want/expect.  In my experience, they won't give you unsolicited information or updates.

Also, to tag a person, you can type "@" before their name, one letter at a time, and it will pop up in the bottom of the post box to click on =)

There are no differences in a reverse mortgage foreclosure and a "regular" (forward) mortgage foreclosure. If you default on either, the process is the same. The reason for default can be the same as well however, a reverse mortgage doesn't typically have a monetary default option available (Didn't make payments). There are usually taxes and/or insurance as the reason for default, or no longer a primary residence and/or other reasons on a reverse mortgage but again, the foreclosure is the same. The process is the same and the results are the same.

Originally posted by @Ron S. :

There are no differences in a reverse mortgage foreclosure and a "regular" (forward) mortgage foreclosure. If you default on either, the process is the same. The reason for default can be the same as well however, a reverse mortgage doesn't typically have a monetary default option available (Didn't make payments). There are usually taxes and/or insurance as the reason for default, or no longer a primary residence and/or other reasons on a reverse mortgage but again, the foreclosure is the same. The process is the same and the results are the same.

 I agree with this post. The foreclosure process is the same (atleast in CA), but the key is to establish the reason for the foreclosure. When the reason for the foreclosure is established you can think of creative resolutions to cure it. I am currently dealing with three of these cases where on one is insurance and taxes driven and the other is decease related and the last one just needed confirmation that it is still a primary residence. If you would like to connect I can share with you my experience and avenues used to resolve these cases. Do you know what is causing the servicing company to forecloses?

@Keishee Hill I'm guessing you're referring to a REO, which has already been foreclosed on, and being sold by the lender. The only difference is that with a RM REO, the property Must be sold for no less than 95% of an FHA appraisal, as the loan is insured by FHA and this is their requirement in order to reimburse the lender. All REO sales haven a"kick out" clause, whereby the lender can cancel the sale without recourse but that usually only happens when they find they have title issue and have to reforeclose.

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