Reverse Mortgage Guide

If you’re looking for one reason to go into the reverse mortgage business, here it is: No worries about borrower incomes.

I bring this up because in the world of “forward” mortgages lenders like to know how much you earn. Or, at least traditionally, they would like to know something about their borrowers and their borrowers’ income.

This need to know about income with forward loans can produce some, er, problems for borrowers without the “right” numbers. One solution might to get a smaller loan or maybe no loan at all.

Another approach is to simply make up stuff. According to Newsday, a former loan manager has gotten two years in jail plus he must pay a $50,000 fine and $190,000 in restitution for falsifying stated-income loan applications. (See: Ex-American Home Mortgage manager going to prison, August 28, 2007).

Of course, had the guy stuck to reverse mortgages he wouldn’t have this problem. Why not?  There’s no need to fudge income. As Financial Freedom, a reverse mortgage lender, explains, “since reverse mortgage borrowers need not make monthly repayments, there are no income qualifications.”

This entry was posted on Tuesday, August 28th, 2007 at 9:55 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.