Reverse mortgage if upside down?

weed30February 19, 2010

My dad owes more than his home is worth, and is facing foreclosure fairly soon if he can't come up with some cash. Even if he pays this time, this situation will keep happening. Can he get a reverse mortgage even though he owes more than it's worth? I know he couldn't get any kind of additional money, just no more mortgage payment, right? He will be 82 in May. The house is in OK shape - needs some repairs but nothing horribly major.

Another question: What type of professional should I seek for advice on his overall financial situation? He owns two other pieces of real estate (commercial) that he's trying to sell, and has a contract on one of them. He owns a handful of collector cars and other items of value. I think I need to work with someone who can look at his entire financial picture and advise on the best way handle his affairs. I am also the executor of his will, when that eventuality occurs.

Thank you for reporting this comment. Undo
worthy

Can he get a reverse mortgage even though he owes more than it's worth?

No. There is no equity in the property.

What type of professional should I seek for advice on his overall financial situation?

Assuming he has funds for any professional, a Certified Financial Planner might be of help. They charge a fee for planning and advice only; in contrast to many other "financial planners", they don't depend on commissions for selling financial products. An annuity, purchased for the liquidated value of the other assets he is disposing of, will be one route you should be considering.

    Bookmark   February 19, 2010 at 8:39PM
Thank you for reporting this comment. Undo
dave_donhoff

Hi Weed,
I'd suggest an elder-law attorney to start.

A reverse mortgage approval requires a minimal amount of remaining equity. Granted, its less & less as the owner is older... but I'm not familiar with any approvals in an upside-down equity scenario.

An elder-law attorney will generally be well-connected with ancillary service providers who can help, but will know up front where your Dad's situation is protectable, and where he is vulnerable.

Luck!
Dave Donhoff
Leverage Planner

    Bookmark   February 19, 2010 at 8:39PM
Thank you for reporting this comment. Undo
weed30

Thanks to both of you. I look at elder-law attorneys and CFPs. If the sale of his one property closes, he will be in much better shape financially. I hope to convince him to sell some of his other assets to keep him afloat. He's very stubborn though.

    Bookmark   February 19, 2010 at 9:59PM
Sign Up to comment
More Discussions
1031 Reverse question
We already purchased an investment property and are...
Patience Spina
Relocating and Finding New Services/People/Businesses
If you are moving or have moved to an unfamiliar town...
DLM2000
what do you do with mail that comes for previous occupants?
I always get mail that is meant for previous occupants...
tlbean2004
Do buyers prefer table & chairs or island in kitchen?
We are getting our house in order before listing it...
pinkpaula
Retiree - rent or buy home
We are newly retired and have a plan to sell our current...
waterlily_girl
Sponsored Products
Paula Deen Down Home Lemonade Stand Molasses Wood End Table - 193804
$485.00 | Hayneedle
Caltha Green 18 x 18 Zigzag Throw Pillow
$57.95 | Bellacor
Perry Mackin Zoey Tote Diaper Bag - Brown - 1002BRW
$175.99 | Hayneedle
Mia Chrome Three-Light Square Canopy Bath Fixture with Copper Foil Glass
$391.50 | Bellacor
Hunter Ceiling Fans Carmen 34 in. Indoor Brushed Nickel Ceiling Fan 51003
$84.97 | Home Depot
Laminate Stair Treads: Cap A Tread Flooring Cross Sawn Chestnut 47 in. Long x
$54.98 | Home Depot
Lennox Overfilled Solid Color Microfiber Down Alternative Comforter
Overstock.com
Fluorescent Ashburne 1Lt Down Pendant Burnt S
PLFixtures
© 2015 Houzz Inc. Houzz® The new way to design your home™