Page 4 - Best Mortgage Reverse_Mortgage_Truth_Neat

That’s because the only reverse mortgage program that we offer at Best Mortgage is the FHA
reverse mortgage program insured by HUD called a “Home Equity Conversion Mortgage”

(HECM).

If you have an FHA HECM loan, you can never be forced out of your home no matter how far
“underwater” you might be with your reverse mortgage balance compared to your home’s
value. That’s one of the many consumer‐protection features of the FHA HECM loan. It is a
“nonrecourse loan” which means neither you nor your heirs ever have to make up any shortfall

if your house is worth less than reverse mortgage balance at the time you sell or move out of
your home.

As long as you live in the home encumbered by the reverse mortgage as your “primary
residence” (live there 6 months or more per year) you never have to make a monthly mortgage

payment and you can never be forced out of your home as long as you maintain the property
and pay your property taxes and homeowners insurance.

But what about “horror stories” like this?

• Wife forced out of home after older husband dies!

It used to be the case that if a younger spouse was not on the reverse mortgage because they
were under 62 years old at the time the loan closed, the “Non‐Borrowing Spouse” (NBS) could
be forced out of the home when his/her spouse passed if he/she could not qualify for a new
mortgage to pay off the existing reverse mortgage balance.

But all that changed when new government rules went into effect on August 4, 2014.

Under the new reverse mortgage rules, the NBS can remain in the home for as long as he/she
lives after their spouse passes as long as he/she meets these requirements:

• The non‐borrowing spouse is married to the borrower at the time of the loan closing (and
remains married to the borrower for the duration of the borrower's lifetime).

• Their spousal status is disclosed at the time of the closing
• The non‐borrowing spouse is named in the loan documents
• The non‐borrowing spouse has occupied, and continues to occupy, the property securing
the reverse mortgage as his/her principal residence

Reverse Mortgage Truth Report ©Best Mortgage Inc. (425) 649‐6000 Page 4