Have read that a reverse mortgage goes into default if the homeowner declares bankruptcy. Can such a homeowner stay in the house
Chicago, IL |
If a homeowner has a reverse mortgage in place and has taken out all the equity value in a lump sum, and then has to declare bankruptcy, what happens to the mortgage? Is the mortgage holder or FHA allowed to foreclose? Or, is the home itself still protected, as long as taxes and insurance are kept up to date, and the home is still being lived in by the original person who took out the reverse mortgage?
If a homeowner files a chapter 13 bankruptcy, they would be able to stay in the home while they workout any defaulted mortgage payments. Chapter 13 bankruptcy would also stop any foreclosure. Please contact me to discuss.