I mentioned back in mid-September that 684,000 homeowners aged 50 or older were either late on their mortgages or in some state of foreclosure.
And while the foreclosure rate for older American homeowners isn’t as high as that of the rest of the population, it’s certainly becoming a serious issue.
Enter First American Corp., with their new so-called “reverse mortgage score,” which aims to determine if a reverse mortgage is an appropriate loss mitigation solution for homeowners 62 and older.
The loan-level score examines a number of criteria, including the number of borrowers on the loan(s) and their ages, eligible residences, appraised value, outstanding liens, and more.
It also takes into account issues that complicate the reverse mortgage process, such as living trusts, bankruptcy filings and powers of attorney.
Once all the numbers are run through the system, the loan servicer receives a report that includes an estimated principal limit after paying off existing liens, fees, mortgage insurance and closing costs.
At that point, the servicer will be able to determine if a reverse mortgage is a viable workout solution to help a senior homeowner avoid foreclosure.
Bank of America has seen explosive growth in the field after acquiring Seattle Mortgage Co.’s reverse mortgage lending business last year.