Quote:
Originally Posted by rayschic
Z,
I'm not saying that it's simple, just that people are blaming the bank, The Villages or whoever without all the facts. Each property is different and I'm just saying, tell the address and we can try to find out if a bank, an individual, an investor, etc owns it. There were three properties in Silver Lake that were due to go up for sale on June 4 for unpaid taxes. The owners for all three properties, are a couple that live in Leesburg. On May 31st , they paid all the back taxes on all three properties. I don't know if these are among the distressed properties because no addresses are being given. If they had gone up for sale, as scheduled, they would probably be bought up by someone that flips houses and would be turned around.
As far as reverse mortgages go, the owner of the property still retains title and is responsible for maintaining it, paying taxes , etc. If the person dies, the heirs are usually given a year to decide what to do with the property. The original owner would still be listed as the owner on all records.
Copied from Wikipedia:
The loan comes due when the borrower dies, sells the house, fails to keep the taxes or insurance current, or moves out of the house for more than 12 consecutive months. Once the mortgage comes due, the borrower or heirs of the estate have an option to refinance the home and keep it, sell the home and cash out any remaining equity, or turn the home over to the lender. Once a reverse mortgage is called due and payable, the borrower (or their heirs) can possibly be granted time extensions by the lender to give them up to one year to make this decision.
If the property is turned over to the lender, the borrower or the heirs have no more claim to the property or equity in the property.
The lender has recourse against the property, but not against the borrower personally and not against the borrower's heirs. Thus the mortgage is within the category known as "non-recourse limit".
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So these houses can sit vacant for up to a year and there is nothing that the bank can do about it. I would guess that like most things legal, after that year is up, the bank would have to go to the courts in order to secure ownership of the property. Who knows how long that would take?
As has been pointed out, in a reverse mortgage, the bank lends somewhere around 50% of the value of the home. Often times with manufactured homes, that is the value of the land so that bank may not care about the condition of the home itself. Once they take ownership, they can sell the lad and retrieve their money.
Additionally, if the borrower has taken the loan in the form of monthly payments. it is possible that the lender has only paid out a small percentage of the value of the home and is owed very little interest.
I'm sure that if it meant that the bank was going to lose money by not maintaing the property, they would be doing everything that they could to keep it up.