What are you Wholesalers doing with Reverse Mortgages?

Question

I have 3 deals in my pipeline that have reverse mortgages.

2 are probate deals where the owner is deceased. 1 is an owner whose house was trashed by Hurricane Sandy, has medical issues and has moved out of the home leaving it vacant.

My understanding about reverse mortgages is that FHA covers the default amount?

I want to know if there is a way to short sale these reverse mortgages or what the process is make these deals profitable.

I cannot be the only wholesaler that is running into these reverse mortgage situations.

Wayne Brooks · Answer

Loan balance wise, it's just like any other loan.  Either there is still equity, or it's a short sale.  Yes FHA inures the lender, but they want market value to limit their loss, like anyone else.

Granison Johnson · Answer

I know this is a little soon, but do you have anything.

Granison Johnson · Answer

Hey Mike, I am running into reverse mortgages all so. Hopefule this thread will pick up steam and a lot of in formation can be shared. I have been reading around the the net about a arm's lenghth sale being posible. I am still collecting information so I will share when I can.

Michael G. · Answer

Thats good information W Tomsin.  Thanks for your input, it was helpful. I was starting to get a little depressed about these reverse mortgage deals. I'll get the ATR from the seller and start from there.

Tom W. · Answer

You would do a short sale with the reverse mortgage. Its basically the same process but I have seen the mortgage company order a full blown appraisal and not just a BPO. Get the homeowner to give you a authorization to release loan info and find out who the mortgage company is.

The good thing I have run into with reverse mortgages is they are usually smaller banks and you should be able to get thru the process quicker and also the banks dont have any restrictions like a normal short sale so you should be able to have all your options open when evaluating an exit strategy.