Out-Living The Loan

Expert, localized Los Angeles answers provided by Heather Roy

Out-Living The Loan
	Dear Ms. Lank: Your column in last week’s paper answered a question I have always wondered about reverse mortgages. (I had wondered what happened if you got to the point of owing what the house could be sold for.) But now that I read "if you owe more than the place is worth, neither you nor your estate is ever charged for the shortfall," I wonder who makes up the difference? Is this possibility factored into the payments you receive? In other words does it work like an annuity; becoming an income you can't outlive?

	With the most widely-used reverse mortgage plan, HUD’s Home Equity Conversion program, something along the lines of the FHA’s mortgage insurance pool covers the shortfall, in cases where the homeowner outlives the value of the property.
	Edith Originally published on September 25, 2005

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