Say it ain’t so. More legal drama for the King of R&B; this time for failing to pay his mortgage (to the tune of $2.9 million) on his Olympia Fields mansion, which he hasn’t actually lived in for over a year. Says HuffPost Chicago:
After failing to pay more than a year of mortgage payments, Grammy winner and “R&B king” R. Kelly now faces a $2.9-million foreclosure lawsuit on his 11,140-square-foot Olympia Fields mansion, Crain’s Chicago reported Tuesday.
We all know that there are only two guarantees in life: death and taxes. Seeing as none of us are going to get out of here alive, it seems appropriate to discuss what happens when the last surviving spouse passes away when a reverse mortgage is secured by the property.
This is a question that comes up with nearly every client of ours when discussing the option of a reverse mortgage loans. And there’s good reason for it. This loan is designed exclusively for older adults aged 62 or older. Seniors want to protect their estate and make sure that they are not making a decision that will harm their legacy when bequeathed to their heirs. So, what happens when the last surviving spouse passes away? The lender is generally notified of a borrowers passing by the family, heirs / estate, by “death audit” service, which compares the lender’s database against other databases including the social security death index, or other methods available. Once the lender has confirmed the death of the last surviving spouse, a letter is sent to all known heirs. The letter acts as a repayment notice that informs the estate / heirs that the mortgage is due and payable as well as all of the options available for satisfying the easy online loans obligation. It’s important to remember that a reverse mortgage is a “non-recourse” loan, which means that the property stands for itself. This means that if the loan balance has grown beyond the value of the property, the heirs / estate could just sign a deed in lieu of foreclosure with no negative effect on their financial standing. If you are planning to invest on real estate then you need to check out the best corporate rentals in Dallas TX.
Brokers and agents do your research and shop around for the best solution. Financing your home through a mortgage brokerage rather than a lending institution can save you both time and money. They work on behalf of their client to find the most suitable product at the best rate. Brokers provide access to virtually every mortgage product available. Consumers expect their own bank will give them the best rate and product. But, the bank does not have access to all the lenders and products available. The bank offers a limited number of mortgages. But, the brokers provide access to over 400 mortgage products on the market. Each of these products have their own distinctive features. They also have access to the new products launching frequently in this dynamic industry. Access to unique products also may only be offered through the mortgage broker. You can click reference for more about the Best Mortgage Rates.
On the flip side, if there’s still remaining equity, the heirs / estate can sell the home or satisfy the lien by any other method available to them and retain whatever equity remains after the debt has been satisfied. The heirs / estate have up to one year to sell the property or payoff the loan. This can be accomplished only by constant communication with HUD and the lender. Per HUD Handbook 4330.1, “If the estate is making reasonable effort to sell the property, extensions should be granted in 3-month intervals with the entire process not to exceed 12 months.” To summarize, dealing with death is not an easy subject, but it is of utmost importance to seniors and their heirs / estate to understand every facet of reverse mortgages including what happens after the last surviving spouse passes away. In the words of Mahatma Gandhi, “Live as if you were to die tomorrow. Learn as if you were to live forever.” There seems to be much confusion today about reverse mortgages, how they work, and what they can be used for. With more seniors than ever looking for a way to tap into the equity in their homes, many of them are looking into a reverse mortgage. However, the process can often be confusing, and they are vulnerable to false information. Let’s take a moment to clear everything up and establish some facts. The first reverse mortgage fact is that you have a right to the equity in your home. They say that your home is your largest investment, and the saying is true. If you’ve paid off your mortgage or only have a small balance left, you have a right to the value in your home. Many seniors are under the impression that the only time they’ll see the benefit of their equity is when the home is sold. While the value will certainly go up in that case, what if they pass away before the house is sold? They never get to see any results from their hard work. A reverse option mortgage allows you to reap the fruit of your many years of labor by releasing the equity in the form of one lump sum, a monthly payment, or a line of credit. Secondly, the fact is that you can use the money from a reverse option mortgage for anything you want. Many resources, or even lenders, will say that you can only spend the money on certain things that are outlined in a contract. This is certainly not the case! You can use the money for literally anything your heart desires — a new car, vacation, or you could even donate it all to charity! There really is no limit. The only exception is that, if you are still making payments on a regular mortgage, the money from the reverse mortgage must first be used to pay it off. After that is taken care of, then the money is all yours. The last, and most important fact is that a reverse mortgage is not free money; it must be repaid. Sadly, many seniors are duped into thinking that they’re receiving a grant. The fact is that you or your heirs must repay the mortgage when the time comes. The size of the reverse mortgage is determined by the type of reverse mortgage selected, the person’s age, the current interest rate, the home’s location and the home’s value. The older the borrower – the larger the percentage of the equity that can be borrowed. The owner retains the title to the property. The property must be the borrower’s primary residence – usually a single family, one-unit home. However some programs accept two-to-four-unit buildings that are owner-occupied. Some will grant reverse mortgages on condominiums and manufactured homes – provided they were built after June 1976. Mobile homes and cooperatives are generally not eligible for a reverse mortgage. The loan will need to be repaid when: the last surviving borrower passes away or sells the property; all borrowers permanently move out of the house; the last surviving borrower does not live in the home for 12 consecutive months – due to physical or mental illness; the borrower fails to pay property taxes or insurance; or the borrower lets the property deteriorate beyond reasonable wear and tear. The heir, or the last surviving borrower, does not have to sell the property to repay the reverse mortgage – they can refinance the reverse mortgage with a traditional mortgage loan -or through the use of other assets.
Kelly’s home, which sits on a 3.7-acre lot, was constructed in the far southern suburb 11 years ago and its value has plummeted in recent years — falling 26 percent in its most recent appraisal to $3.8 million, as compared to its $5.2 million 2009 value, according to Crain’s. Therefore, Kelly, who has not lived in the home for more than a year, faces debts on the property that likely exceed its current value.
A person reportedly close to Kelly told Crain’s the singer had stopped making payments on the mortgage in order to force the bank to renegotiate the loan.
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