Your Mortgage : Lenders Leery About Reverse Loans

QUESTION: I am in my mid-70s and am interested in information on “reverse mortgages.� Is there a lender in our vicinity? I own my own home and am on Social Security, which does not meet all the expenses. My husband has been ill for three years and his medication is very expensive.

ANSWER: I wish I could be more encouraging about this good-idea-whose-time-has-come-but-oh-so-slowly. Lenders are still leery about writing RAMs (reverse annuity mortgages). With a RAM, a free and clear home serves as collateral for a monthly check to the owner for life without requiring the owner to give up physical possession of the property. Lenders see it as a long, long wait before they get their money back.

Currently, HUD (the Department of Housing and Urban Development) is underwriting a pilot program protecting lenders against loss on the RAMs they write, but only 2,500 such loans have been authorized nationally. And in your area, for instance, only 50 such loans have been allocated for both the entire states of California and Arizona--not even a drop in the bucket.

So, until Congress authorizes a more meaningful approach (the figure of 35,000 RAMs nationally is being discussed), everything is on hold.

Homeowners Failed to Get Deed Signed Over

Q: We bought our home 22 years ago. We were young and naive and did not realize at the time that we did not get the deed signed over to us.

We have contacted the former owners through certified letters explaining that they have nothing to gain by not signing the deed over to us, but we did not even get an acknowledgment. They live in another state, so we cannot contact them personally. What can we do to get our home deeded to us, the rightful owners?

A: When the time comes to sell the home the fact that the deed isn’t recorded in your names is going to present a distinct problem.

You’re going to have to hire yourself a good lawyer and have him pursue this and impress on the previous owners that they could be facing some legal fees themselves if it becomes necessary for you to go to court and get a judgment establishing your ownership.