Homeowners and Reverse Mortgages

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Maryland Legal Aid Offices

Anne Arundel County Montgomery County 229 Hanover Street 600 Jefferson Plaza Annapolis, MD 21401 Suite 430 Reverse (410) 972-2700 Rockville, MD 20852 Maryland Legal Aid: Who We Are (800) 666-8330 (240) 314-0373 Mortgages Baltimore City (855) 880-9487 Maryland Legal Aid is a non-profi t law fi rm You should not take out a reverse mortgage if: 500 E. Lexington Street Northeastern Maryland Baltimore, MD 21202 Cecil, Harford Advancing Human Rights and Justice for All in Maryland since 1911 dedicated to providing high-quality legal • You feel rushed or pressured to take out a Telephone Intake Lines: 103 S. Hickory Avenue advocacy to protect and advance human rights reverse mortgage by someone, or do not (410) 951-7750 Bel Air, MD 21014 (866) MD LAW 4U (410) 836-8202 for Maryland’s most vulnerable low-income understand the loan. For example, some reverse (or 866-635-2948) (800) 444-9529 mortgage sellers promise to complete home individuals, families and communities. Business Line: Southern Maryland repairs, but then they do not complete the repairs. (410) 951-7777 Calvert, Charles, St. Mary’s You should talk to a lawyer if that has happened to (800) 999-8904 15045 Burnt Store Road Homeowners Baltimore County P.O. Box 249 What is a Reverse Mortgage? you. You can also fi le a complaint with the Maryland Hughesville, MD 20637 215 Washington Avenue Offi ce of the Attorney General (301) 932-6661 Suite 305 A reverse mortgage is a type of home loan for (877) 310-1810 (1-888-743-0023), the Consumer Financial Towson, MD 21204 and Reverse homeowners who are 62 years of age or older. Protection Bureau (1-855-411-2372), or the Federal (410) 427-1800 Upper Eastern Shore (877) 878-5920 Caroline, Kent, A reverse mortgage does not require monthly Trade Commission at ftc.gov/complaint. Lower Eastern Shore Queen Anne’s, Talbot Mortgages 106 N. Washington Street payments. A reverse mortgage uses your home You do not want debt to accumulate on your Dorchester, Somerset, • Suite 101 Wicomico, Worcester equity, which is the current market value of house. Interest is the percentage of a loan paid by Easton, MD 21601 201 E. Main Street (410) 763-9676 borrowers to lenders. Over time, the balance on a Salisbury, MD 21801 your home minus what you still owe on the (800) 477-2543 reverse mortgage increases due to interest. Reverse (410) 546-5511 mortgage. The cash proceeds from a reverse mortgages are often expensive to initiate, with lots (800) 444-4099 Western Maryland mortgage may be off ered as a line of credit Metropolitan Maryland Allegany, Garrett of fees and costs added to the loan. It is important 110 Greene Street Howard, Prince George’s that you understand all the costs associated with Cumberland, MD 21502 that you can use, a lump sum payment, or a 8401 Corporate Drive (301) 777-7474 your loan. Suite 200 monthly payment. The money from a reverse (866) 389-5243 Landover, MD 20785 mortgage can be used to pay for living or • You want to leave your house to your children (301) 560-2100 Statewide or other heirs. If your children or heirs (a person (888) 215-5316 medical expenses, to pay off the remaining fi rst Community Lawyering legally entitled to the property after you die) want Howard County Initiative mortgage, or for any other purpose. to keep your home after you die, they must be 3451 Court House Drive (443) 451-2805 2nd Floor able to pay the total loan amount or 95% of the Farmworker Program Ellicott City, MD 21043 (800) 444-4099 (410) 480-1057 While taking out a reverse mortgage may seem fair market value of the home, whichever is less. Foreclosure Legal like a good idea, you should make sure it is the It is important that you talk to your children or Midwestern Maryland Assistance Project heirs about this so they can prepare. If your spouse Carroll, Frederick, Washington (888) 213-3320 right option for you. While reverse mortgage 22 S. Market Street Long-Term Care dies and he/she had a reverse mortgage and you Suite 11 companies often promise a worry-free way to stay still want to stay in the home, call your reverse Assistance Project Frederick, MD 21701 (866) 635-2948 in your home as you get older, this may not be mortgage servicer immediately. This can be a (301) 694-7414 (800) 679-8813 Maryland Senior true. Before you apply for a reverse mortgage, you diffi cult process, so you should contact an attorney Legal Helpline for possible legal representation. (continued) (866) 635-2948 should meet with a reverse mortgage housing Veterans’ Hotline counselor, in person, if possible. (443) 863-4040 TTY Users: Call Maryland Relay, Dial 7-1-1 Visit www.peoples-law.org for self-help www.mdlab.org legal information and community resources. For more information visit www.mdlab.org. Rev 08.2020 8.31.20 Obtaining a Reverse Mortgage Reverse Mortgage Foreclosure Additional Resources

You should not take out a reverse There are two types of reverse mortgages: If you have a reverse mortgage, you may still Maryland Legal Aid mortgage if: (continued) Reverse mortgage information and reverse mortgage Federally-insured Home Equity Conversion Mortgage face foreclosure. A reverse mortgage foreclosure • foreclosure help: • You cannot afford your property taxes (HECM) happens most often because of missed property mdlab.org and homeowner’s insurance. Some reverse • Private lender reverse mortgage tax payments or missed homeowner’s insurance mortgages may set aside property taxes and Phone numbers for local MLA offices can be found on the back of this brochure. homeowner’s insurance, but others do not. If you For a borrower to qualify for a reverse premiums. The foreclosure process for a reverse are currently behind on your mortgage, you will mortgage, a borrower must: mortgage is the same as for a regular mortgage. U.S. Department of Housing and be required to have money set aside for property Urban Development taxes and homeowner’s insurance. If you have a • Be 62 years of age or older; For more information about the foreclosure Home Equity Conversion Mortgage (HECM) Program: reverse mortgage that does not set these funds • Own the property outright or have paid down a process in Maryland, see MLA’s Homeowners aside, and you miss these payments, the reverse hud.gov/program_offices/housing/sfh/hecm/ considerable amount of the existing mortgage; and Foreclosure brochure. mortgage lender may foreclose on your home. hecmhome You should make sure you pay your homeowner’s • Occupy the property as his/her principal residence; Reverse mortgage lenders often offer different 1-800-225-5342 insurance and property taxes on time. If you • Have no delinquencies on any federal debt; modification options. The most common Consumer Financial Protection Bureau cannot afford to pay your property taxes, be sure to apply every year for the Homeowner’s Property • Participate in a consumer information session options offered are repayment plans and an Reverse mortgage information: presented by a HUD-approved HECM counselor; and http://files.consumerfinance.gov/f/201409_cfpb_guide_ Tax Credit from the Maryland State Department of at-risk hardship extension. A repayment plan Assessments and Taxation. • Be willing to have his/her income, assets, monthly reverse_mortgage.pdf allows a borrower to repay what he/she owes 1-855-411-2372 • You plan to sell your home or you do not living expenses, and credit history verified. over a period of time, usually for 5 years. An at- plan to stay in the home. A reverse mortgage AARP Foundation becomes due when the home is sold, or if you For a property to qualify for a reverse risk hardship extension allows borrowers who Reverse Mortgage Education Project: move out of your home. If you leave your home mortgage, the property must: are 80 years of age or older, with a note from aarp.org/money/credit-loansdebt/reverse_mortgages/ for more than a year, the reverse mortgage lender • Be a single family home or 2-4 unit home with one their doctor, to defer the foreclosure annually. 1-800-209-8085 may foreclose on your home. unit occupied by the borrower; or Other options you may wish to consider, • Be a HUD-approved condominium project; or Maryland HOPE Hotline like bankruptcy, are discussed in MLA’s Reverse mortgage foreclosure help: • Be a manufactured home that meets FHA requirement; and Homeowners and Foreclosure brochure. 1-877-462-7555 • The real estate taxes, hazard and flood insurance premiums on the property may be verified for timely payment history.