Reverse mortgages have been in quite the limbo following the new legislation that was passed in October of 2017. However, things have gotten even more trickier for borrowers following the latest tax overhaul, approved by the majority of Republicans.
"For reverse mortgage borrowers, property taxes represent a major chunk of ongoing payment obligations, along with homeowner’s insurance," according to Reverse Mortgage Daily.
"At least one consumer advocate, foreclosure defense lawyer Joshua Denbeaux, has warned that capping SALT deductions could have an adverse impact on seniors with Home Equity Conversion Mortgages."
Not all experts believe that this could be the same effect across the board. In fact, some believe that it would be purely situational and entirely based on the financial situation of the borrower.
"But professionals in the HECM industry pushed back on the concerns," according to the report.
"Tom Holsworth, vice president of reverse mortgage lending at the Queens, N.Y.-based Quontic Bank, said some higher-end HECM borrowers could end up coming out ahead overall thanks to the automatically higher standard deduction — which nearly doubled for married couples filing jointly, rising from $12,700 to $24,000."
The real test will come once the new reform takes effect and borrowers get a taste of what to expect. To learn more about possible effects that the new tax overhaul can have on reverse mortgages, click on the image above.