Reverse mortgages provide these consumers with a line of credit, a monthly payment or a combination of the two. Funds are sent directly from the lender to homeowners by check or by direct deposit, and homeowners may switch between line of credit and monthly payment options as often as desired. No repayment is required as long as the consumer maintains the home as his or her primary residence. Homeowners retain title to their homes and can leave a home to their heirs, who can either pay off the loan or sell the home to retire the debt. Regardless of whether the loan comes due because of death or relocation, the lender can only look to the proceeds of the home's sale for loan repayment.
Any negative difference is forgiven.
For many consumers, the reverse mortgage has been an effective tool to help manage their costs and lifestyles. In particular, reverse mortgages have helped senior homeowners maintain or improve their standard of living by giving them immediate access to their home equity. In addition to potential goodwill, depository reverse mortgage lenders benefit from CRA consideration and increased core deposits from monthly payments sent by the servicer to borrowers' bank accounts. SHFS, headquartered in Ft. Lauderdale, Florida, is directed by key executives who have decades of experience in the mortgage industry and the financial services business.