Kenneth, while this article is not written for wholesalers, it does give some useful perspective on how, when and why a homeowner might reasonably be able to get out from under a reverse mortgage at sale time:
always hit a brick wall when I tried to deal with a property with a reverse mortgage. The lender is HOPING to get the house back and does not appreciate anyone messing up their plan… that was my experience
And it’s not just the article itself. There is a long list of related article links below the main article. My guess is that the more equity the reverse mortgage lender expects to be able to steal, the more roadblocks it will try to use to wreck your plans.
I worked for one of the largest (RM) reverse mortgage companies (AIG) a few years ago in Orange, California.
And I hated every minute of it!
A few takeaways:
They are VERY expensive for the borrower. Both in closing costs, points and long-term interest.
The RM companies prey on the financially naive. No payments, no qualifying, etc.
They use pitchmen like Tom Selleck and former actor / Senator Fred Thompson. What that has to do with mortgages is = NOTHING!
They pitch AMERICA, safe and secure, etc.
The pitch is the loans are government guaranteed. But the guarantee applies to the LENDER, not the borrower.
There is ALWAYS a cost for no payments, no qualifying, etc.
That cost is SEE ABOVE.
Jackie is right — its VERY difficult to work with any of them. Unless the mortgage balance is very low and can be paid off, best move on to greener pastures.
Sorry if this comes off like a rant.
Bottom line: there are other, safer ways to pull equity from a house without using a RM.
If I can help, please let me know.
If you have a reverse mortgage you want to sell, be very careful. There are so many regulations to ‘protect’ the borrower.
If so, give us some details and we’ll figure out a way to make it work.