When Equity Won’t Land a Reverse Mortgage

What happens when a senior has equity in his home but can’t qualify for a reverse mortgage? A traditional line of credit you may say? But what if you have no real means of paying the HELOC back? Then you share a situation with 64 year old John Thiel.

“He didn’t qualify for a reverse mortgage because he didn’t have enough equity in his property, because the market value went down and because from one year to the next, his loan for $112,000 jumped to $121,000 for the payoff,” Dunbar said.

Dunbar said the value of Thiel’s home dropped 32 percent from last year, when he applied for a refinance loan in May 2007. The lower market value and Thiel’s age means the most he can get in a reverse mortgage loan is $70,406.

“In his situation, he could lose his house. Unless he can come up with $650 on a monthly basis, and that’s all but roughly $240 of his income,” Dunbar said.

Thiel’s story was told in the April 17 edition of the Record-Bee. He said despite community response to his story, not a drop of money has landed in a WestAmerica bank account named “Save our home” that he opened. Lake County Bee Record.

Written by charles dennis on May 1st, 2008 with comments disabled.
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