An Attorney’s Guide to
Reverse Mortgages

Garrett Duffy

Loan Officer
Reverse Mortgage Specialist
NMLS #1626638
Direct: 401.330.7317
[email protected]

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I created this website to serve as a one-stop resource for “everything you’ve ever wanted to know about reverse mortgages but were afraid to ask.” I work with attorneys of all types—including General Practice, Elder Law, Real Estate, Divorce, and more—to provide clear insight into how reverse mortgages work, their benefits, and the key considerations for clients. Together, we can determine whether a reverse mortgage is the right solution for your clients.

All about Reverse Mortgages

Reverse Mortgage Basics
  • Must be 62 years or older
  • Must be primary residence
  • No monthly payment required
  • Must be in first Lien Position

You can pay off a mortgage with a reverse mortgage

Proceeds can be received as
  • Lump sum
  • Line of credit
  • Monthly checks
  • Combination of above
Irrevocable and Revocable Trusts?

A reverse mortgage can be done on an irrevocable or revocable trust, but it must be approved by lender prior to counseling/application.

Can a Non-borrowing spouse be eligible for deferment?

Yes, but it has to have been the Borrowers spouse when the loan closed and throughout the duration of the Borrowers lifetime

It must have been properly disclosed to the lender

Non- borrowing spouse must occupy and continue to occupy the home as their primary residence

Can Children remain on title?

Yes, they can remain on title, without occupying residence
Any title holders MUST do HUD counseling, sign certificate and security instruments

income and credit Guidelines

We use a lenient residual income method

Credit Requirements:

  • 24 months of on time property tax payments
  • 12 months of on time homeowners insurance (HOI)
  • Overall history of good credit
  • If the borrower does not meet income or credit guidelines, the lender will require a Lifetime Set-Aside to cover property taxes and homeowners insurance
60% - 40% Rule
In the first 12 months of a HECM reverse mortgage, borrowers are limited in how much they can access. The maximum available is:

The amount needed to cover all mandatory obligations (such as paying off an existing mortgage, closing costs, or required set-asides), plus up to 10% of the Principal Limit, or 60% of the total Principal Limit, whichever is greater.

After 365 days, any remaining funds become available.

POA vs. conservators

A Power of Attorney can be used in a Reverse Mortgage transaction, but HUD requires strict compliance to ensure validity:

  • If the borrower is competent, they may choose to use a POA for convenience.
  • If the borrower is incompetent, the lender must obtain both a durable POA and a physician’s letter confirming incapacity

Conservators – court must approve the Reverse Mortgage, and conservator must do HUD counseling

Reverse for Purchases?
  • Used for Right sizing / Downsizing
  • Moving close to grandkids / family
  • Recetly divorced
  • Self Employed with low income
Who is required to do HUD counseling?

The borrower

Spouse of the borrower (regardless if they live in the home or not)

Anyone on title

Closing a reverse mortgage

Two identical mortgages / notes to be recorded (One in favor of the lender and one in favor of HUD)

Lien is 150% of the appraised value

Jumbo Portfolio products

Up to $4,000,000 loan limit ($2,000,000 in MA)

Lower cost

Most common reasons for clients to take out a Reverse Mortgage

PAY FOR IN-HOME HEALTHCARE

RUNNING OUT OF MONEY

AVOID FORECLOSURE

PAY OFF EXISTING MORTGAGE

SPOUSE PASSES AWAY

BUY A HOME

PAY OFF LINE OF CREDIT

SILVER DIVORCE

REPAIR HOME

Client’s Frequently Asked Questions

What is a Reverse Mortgage?

A reverse mortgage** is a way for seniors to turn their home’s equity into cash to meet any financial need. Unlike traditional home equity loans, a reverse mortgage does not require repayment until the home is sold, or the last borrower permanently leaves the home. Borrowers are responsible to cover taxes, insurance, HOA fees, and property maintenance, just like any other mortgage.

  • The borrower(s) continue to own the home (the bank does not own it!)
  • The borrower(s) can never owe more than the home is worth.
  • There is no prepayment penalty.
  • The reverse mortgage must be paid back when the home is no longer the borrower(s) primary residence.

Call me if you have any clients who could benefit from a reverse mortgage. 401.330.7317. *The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

What can a Reverse Mortgage be used for?

Reverse mortgage borrowers may use the proceeds however they wish. Some examples include: pay off a mortgage, pay off credit cards, pay off home equity loans, make home repairs, pay property taxes, stop foreclosure, travel, or purchase a home.

How Much Money can I take out of My Home?

That will depend on your age, the interest rates, and your home’s value. Older borrowers generally qualify for more funds.

How do I receive the Proceeds?

You can take your funds as a lump sum, a line of credit, or as monthly payments. You can also use a combination of these options.

Will I have to repay the loan?

The loan becomes due when the home is no longer the borrowers principal residence. This happens when the borrowers die, the home is sold, or the borrowers live in a nursing home for 12 months or more.

What happens if I pass away? Can I leave the home to my heirs?

After the borrowers have passed, the heirs have multiple options. They may choose to sell the home, refinance the home, pay off the home, or walk away through the use of a deed-in-lieu of foreclosure. If the heirs decide to sell or refinance, the reverse mortgage is paid off at closing and any remaining equity becomes their inheritance. If you owe more than your home is worth but sell your home for the appraised fair market value, the remaining balance will be paid by mortgage insurance.

Does the bank own my home?

No. A reverse mortgage allows homeowners to retain the title and ownership of their home for as long as they live in the home and the loan remains in good standing. Like other loans, this requires the borrower to keep up with property taxes, insurance and maintenance.

Reviews from Attorneys

I recently worked with Garrett Duffy from Supreme Lending to secure a reverse mortgage for one of my clients, and I couldn’t be more pleased with the experience. From the initial consultation to the final closing, Garrett demonstrated a high level of professionalism, knowledge, and dedication.

They took the time to clearly explain the process, answered all of our questions promptly, and made sure my client and her family felt comfortable and well-informed every step of the way.

Their attention to detail and commitment to doing what was best for my client truly stood out.

Thanks to Garrett’s expertise and support, the reverse mortgage was completed smoothly and efficiently, providing my client with the financial flexibility she needed. I would not hesitate to recommend Garrett to anyone considering a reverse mortgage or any other home financing options. – Alexander Thige

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“As a real estate attorney I come in contact with many loan originators every day and not all of them are created equally. Recently I had the pleasure of working with Garrett Duffy on a reverse mortgage for his clients. Reverse mortgages can be wonderful tools however the intricacies of them can be overwhelming and confusing. Garrett attended the closing and it was amazing seeing him “in action”, making sure the clients knew exactly what they were signing and answering any questions they had. Garrett definitely gives his clients white glove service and I am looking forward to working with him again in the near future.” – Jody S

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“Garrett’s expertise as a Reverse Mortgage Specialist are an invaluable resource to my Elder Law practice. Most recently, he helped a client of mine afford to stay in his home when my client’s spouse required nursing home care and their household income was greatly reduced as a result. Garrett has the knowledge, empathy and patience it takes to make sure my clients truly understand their reverse mortgage options and my clients feel protected and safe working with Garrett. If you or your clients are considering a reverse mortgage as part of your financial plan or Medicaid planning strategy, I would not hesitate to recommend Garrett Duffy!” – Elizabeth P

Read Review

As a real estate attorney I come in contact with many loan originators every day and not all of them are created equally. Recently I had the pleasure of working with Garrett Duffy on a reverse mortgage for his clients. Reverse mortgages can be wonderful tools however the intricacies of them can be overwhelming and confusing. Garrett attended the closing and it was amazing seeing him “in action”, making sure the clients knew exactly what they were signing and answering any questions they had. Garrett definitely gives his clients white glove service and I am looking forward to working with him again in the near future. – Michelle T.

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