Reverse Mortgage Consideration – WABI-TV

Video of interview featured January 7th WABI-5 Morning News

This morning, Russ Van Arsdale with Northeast Contact discussed reverse mortgages also known as a home equity conversion mortgage.

It’s a financing arrangement for people 62 and older who own their homes outright or have a small mortgage. Instead of you making payments, a reverse mortgage allows you to receive money, based on the equity of your home.

Russ warned our viewers that the deal can be too good to be true.

He advises folks to log onto www.hud.gov and search for reverse mortgage.

Also, if you are approved for a reverse mortgage, you still need to pay for normal maintenance on the home, pay for property taxes and homeowners insurance, pay the mortgage insurance premium, and pay loan orientation and servicing fees and closing costs.

You’ll also probably pay a $125 feed for counseling with an organization approved by the U.S Department of Housing and Urban Development. That’s required to get a reverse mortgage, although the fee can be waived.

Maine Joins $25 Billion Joint State-Federal Mortgage Servicing Settlement on Forclosure Wrongs: State share of national settlement estimated at $21,000,000

February 9, 2012

Attorney General William J. Schneider announced that Maine joined a landmark $25 billion joint federal-state agreement and the nation’s five largest mortgage servicers over foreclosure abuses, fraud and unacceptable nationwide mortgage servicing practices.

U.S. Attorney General Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and a bipartisan group of 49 state attorneys general announced the national settlement today in Washington, D.C.

“This agreement lays out the best first step to get relief directly to eligible Maine borrowers who were harmed,” said Attorney General Schneider. “The statewide impact of these prohibited foreclosure practices will be offset through funding for foreclosure prevention programs, legal assistance to homeowners in foreclosure, and compensation to the state’s general fund.”

The state’s estimated share of the settlement is $21 million.

• Maine’s borrowers who are in default on their mortgages will receive an estimated $7 million in direct borrower relief through principal reduction, short sales, borrower transition efforts, etc.
• Maine’s borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 qualify for a cash payment from a $1.9 million fund set aside for this purpose.
• The value of refinanced loans to Maine’s underwater borrowers who are current on their loans would be an estimated $4.5 million.
• The state will receive a direct payment of $8.2 million for state foreclosure prevention programs, legal assistance to homeowners and the general fund.