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The Reverse Mortgage Process: An Interview with Susan Pieri of Susan C. Pieri, Attorney

By Susan Pieri

Tell us a little bit about your company and its foundation.

I am the owner of a small law firm where real estate comes first. I have been practicing real estate law for more than 20 years. From 1994 through the beginning of 2006, I was the real estate and probate of estates attorney at two other small law firms. Since 2006, I have practiced law on my own in Marshfield. I have closed more than five dozen reverse mortgages since 2002.

Could you briefly explain what a reverse mortgage is?

After years of paying off their mortgage, the home owner(s) have built up equity in their property. With a Reverse Mortgage, the owners borrow against that built up equity. The reverse mortgage loan balance grows over time. The borrower doesn't have to pay any monthly payment on the loan while they live in and maintain ownership of the home. The owners are responsible for paying the property taxes and homeowners insurance.

When the owners move out, sell the home, or pass away, the loan must be paid off within one year. The loan is typically paid off when the home is sold from the proceeds that are available. If the home sells for less than what is owed on the Reverse Mortgage, the seller is not responsible for any shortfall.

How can clients prepare for this process?

All owners listed on the deed must be at least 62 years old in order to qualify for a Reverse Mortgage.

A recently added qualifying factor requires the owners to undergo a financial assessment to determine if they have the ability to pay the taxes and homeowners insurance on the property. If the owners don't have the ability to pay the taxes and insurance, the lender will set aside (hold back) a portion of the credit line advance to assure the taxes and insurance will be paid.

Also, before the loan is closed, the owners are required to speak with a counselor to make sure that they understand how the Reverse Mortgage works and what their responsibilities are.

What are some common issues you face when it comes to a reverse mortgage?

The most common issue that arises in processing a reverse mortgage is with the appraisal. The house has to have a minimum value. If the appraised value comes lower than required, the loan will not be approved.

Also, as a result of the appraisal, the owners may be required to make some repairs to the home. The lender will hold back some of the funds for the repairs, and set a deadline for making the repairs. If the owner is unable or unwilling to make the repairs, the lender may seek to recover the funds it advanced using the power given to it in the mortgage.

How long does the process typically take?

The processing time for application to closing of a Reverse Mortgage is typically 45 to 60 days.

What's the best way for people to get in contact with you?

Please feel free to call me at 781-834-6751 or 781-834-1134, or to email me with any questions. My website has additional contact information.

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About The Author

Susan Pieri has been practicing real estate law since 1994. From 1994 through the...

Phone: 1-781-834-6751

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