Welcome to “Ask the Pros” – where your questions meet the wisdom of those who understand the ins and outs of reverse mortgages! If you have questions about unlocking the power of your home equity, navigating the ins and outs of reverse mortgages, or making informed decisions about your financial future, you’re in the right place.
In this exclusive series, we tap into insights and expertise directly from our wonderful team members at Longbridge Financial who are helping to shape the reverse mortgage industry each day. Our team of seasoned professionals will field common questions, unravel complexities, and provide invaluable insights to empower you on your financial journey.
Whether you’re a homeowner considering a reverse mortgage, a financial advisor seeking new perspectives, or are simply curious about the unique retirement tool, “Ask the Pros” is your go-to source for reliable insider information. Join us as we explore the nuances of reverse mortgages, debunk myths, and uncover strategies to make the most of your home equity and make informed decisions.
Our next pro in this series is Rick Burke, Longbridge Financial’s Senior Vice President of Servicing and Post Closing. Rick leads our wonderful loan servicing and post closing teams who work with our valued clients every day, giving him an unmatched insider perspective. We sat down with Rick to discuss reverse mortgage borrower obligations and expectations for the life of their loan. Let’s see what he had to say!
Q: What are my obligations once I close on a reverse mortgage?
A: Once your reverse mortgage closes and funds (exciting!!), your loan will be set up in the Longbridge servicing system. From there, a welcome packet containing a Welcome letter, New Loan Reference Guide and a Privacy Notice will be sent to your mailing address on file. These documents are mailed in a plain white envelope, so be on the lookout for them to arrive 7-10 days after your loan funds with Longbridge Financial. Remember, while your loan is being serviced you are responsible for keeping up to date with property taxes, homeowners insurance, home maintenance, and HOA dues, if applicable.
If your loan was set up with a fully funded Life Expectancy Set-Aside (LESA) account, which is similar to an escrow account, our servicing department will pay your property charges from the established LESA. Alternatively, if you have a partially funded LESA, the funds will be sent to you so that you can pay them to your local tax office directly.
Each year around the anniversary of the closing date of your loan, you will receive a request to certify your occupancy of the home and to attest that the home remains your primary residence. You will have the opportunity to do that either over the phone through an automated service by calling our Borrower Care team at (866) 654-0020, on your borrower portal at reversedepartment.com, or by faxing, emailing or mailing a form from the borrower portal to us as instructed on the form. Alternatively, a form will be mailed to you during your closing month each year that you can complete and return. It’s nice to have options!
If you selected a term or tenure disbursement plan, each month our Servicing department will send your monthly payment by the first business day of the month. We highly recommend that you enroll in the Electronic Funds Transfer (EFT) process to accept your monthly payments via direct deposit to your bank account.
If there are repairs required to your home, as listed on a Repair Rider to your loan agreement, and you have a Repair Set-Aside account established to pay for those repairs, you are required to complete those repairs by the due date listed on your Repair Rider. If at any time you need assistance with servicing of your reverse mortgage, you may consult the common questions and other information available on your borrower portal, or you may reach a Borrower Care Representative at (866) 654-0020, Monday through Thursday 8:00am – 7:00pm ET, and Friday 8:00am – 5:00pm ET.
My answer has touched on a lot of important and nuanced facets of reverse mortgages but it’s important to remember that, as you move through the loan process from application to closing, our team will be by your side every step of the way. At Longbridge we pride ourselves on our commitment to providing our borrowers with the educational resources they need to make a fully informed decision for their financial wellbeing. And our highly trained reverse mortgage consultants will be ready to answer your questions at any point in the process.
Q: What happens if I move out, relocate to a full-time care facility, or pass away?
A: After your loan closes, if you move out or relocate to a full-time care facility permanently, your loan will have to be repaid and will become due and payable. But it’s important to know that you’ll still have options to avoid foreclosure by selling your property to repay your balance in full, or you may qualify for a short sale. You may also have an option to do a deed in lieu of foreclosure.
If you are away from your home temporarily for more than 2 months, you must notify Longbridge immediately and provide your temporary address for mail forwarding. You can notify us by calling (866) 654-0020 or completing a “Change of Mailing Address” form found here: reversedepartment.com/common-forms. You should then update your mailing address again using the same form when you return home.
Like any loan, your reverse mortgage will have to be repaid when the last living borrower or eligible non-borrowing spouse passes away. Similar to a permanent move out, your heirs will have the same options described above to avoid foreclosure. We encourage you to bring your heirs into the conversation as early as possible and keep them in the loop throughout the life of your loan. Your heirs can find additional information about what to expect when they inherit a home with a reverse mortgage in our Guide for Heirs.
Before going any further, I should mention that one of the many consumer protections built in to reverse mortgage loans is the “non-recourse” feature. Non-recourse means that neither you nor your heirs will have to pay more than the loan balance or the appraised value of the home at the time the home is sold and the loan is repaid, whichever is less. If the home depreciates in value to the point that the balance owed exceeds the value of the home, you will not be responsible for repaying more than what the home is worth at the time of its sale.
Depending on the type of reverse mortgage you have, anytime your loan becomes due and payable and must be repaid, you or your heirs will have the option to request extensions to allow for additional time to satisfy the reverse mortgage repayment. Communication is critical during this process and once possible, you or your heirs should call our servicing department at (866) 654-0020 to notify us of the situation. At that time, we will have one of our trained customer care representatives help you through the process and explain your available options in greater detail.
When you work with Longbridge, you have our commitment that your call will always be answered by a real, live person that can help you with your reverse mortgage loan. You’ll receive trusted, personal, professional support through each step of the process – from application, to closing, to servicing, and beyond.
Thank you, Rick, for sharing your insights and providing a deeper look at reverse mortgage obligations!
If you’re interested in learning more about reverse mortgages and to find out if you qualify, contact our team today. Our reverse mortgage consultants will get to know you and your financial situation to help you determine whether a reverse mortgage is the right fit for you. Empower your financial journey – reach out to Longbridge Financial now to make an informed decision about unlocking the Power of Home™️.
