Florida Reverse Mortgage

Non Recourse Loan

2008-04-06T13:55:00-05:00

Non Recourse means that you or your estate can never lose more than the home. If your home goes into foreclosure on a recourse loan, and there is still a balance owed after the home is sold at auction, the lender can seek reimbursement from your other assets. They can file judgments and against other property and seize assets to regain their losses.

On a non recourse loan, the lender can only take the home, nothing else. This means that all other assets in our estate are safe in the event you walk away from the home. If you owe $500,000 and your home is only worth $200,000 when you pass away, the bank cannot seek the remaining $300,000 from your estate. All of your estates assets are untouchable because HECMS are NON RECOURSE!

All government insured reverse mortgages are non recourse, but other reverse mortgages may not be. Make sure you understand the terms and conditions of the reverse mortgage you are seeking. If you are getting a government insured HECM reverse mortgage the guidelines are all the same. If you are getting a non government insured reverse mortgage the terms can vary widely from lender to lender.

Acceleration Clause

2008-04-06T13:43:00-05:00

The acceleration clause is the part of a mortgage that allows a lender to call the remaining principal balance due, and ultimately take the property through foreclosure if the acceleration demand is not met.

On a forward mortgage the acceleration clause is triggered if the monthly payments are not made on time. Everyone knows if you don't make your payments you loose your house. What most people don't understand is that reverse mortgages have an acceleration clause as well, but it is triggered under different circumstances.

The main reasons are reverse mortgages is accelerated (meaning the entire remaining balance becomes due immediately) include: the borrowers pass away or the borrowers no longer occupy the home.

When either of these events occur, the reverse mortgage becomes due. If you or your heirs wish to keep the house they must satisfy the acceleration and pay off the mortgage. If you don't, you can just walk away with no consequence other than the bank taking the house because a reverse mortgage is a non-recourse loan. "Non recourse" is discussed in another article.

203b Limit, Max Claim

2008-04-06T10:18:00-05:00

All HECM Reverse Mortgages are subject to the 203b loan limit (FHA Loan Limits) this is sometimes referred to as the "max claim" amount. When your reverse mortgage benefits are being calculated the lender must use the LESSER of your home's appraised value and the FHA Loan Limit.

For example if you live in a low cost county, the current loan limit is $200,500. If your home was worth 205,000 or 305,000 your benefit would be the same because the calculations would be based on the loan limit since it is LESS than the appraised value. If you value was only 190,000 then your calculations would be based on value.

Below is a list of Florida Counties that are above the base limit of $200,160. Any county in Florida not listed below is limited at $200,160.

ALACHUA  $204,440
BAKER  $294,500
BAY  $300,960
BREVARD  $221,350
BROWARD  $362,790
CHARLOTTE $224,209
CLAY  $294,500
COLLIER  $362,790
DUVAL  $294,500
FLAGLER  $218,500
GILCHRIST $204,440
HERNANDO $222,300
HILLSBOROUGH $222,300
INDIAN RIVER $213,750
LAKE  $268,850
LEE  $270,750
MANATEE  $336,100
MARTIN  $276,640
MIAMI-DADE $362,790
MONROE  $362,790
NASSAU  $294,500
OKALOOSA $237,405
ORANGE  $268,850
OSCEOLA  $268,850
PALM BEACH $362,790
PASCO  $222,300
PINELLAS $222,300
POLK  $205,200
SARASOTA $336,100
SEMINOLE $268,850
ST. JOHNS $294,500
ST. LUCIE $276,640
SUMTER  $211,375
VOLUSIA  $230,177
WALTON  $362,790