HUD-backed reverse mortgages and home-equity products limit you to 60% of your equity in year one, holding the rest until year two. The rule was designed decades ago to stop borrowers from blowing cash and defaulting. Foreclosures under these programs are rare.
It's just like any other home equity loan or refinance. When you take the equity out of your property, you get to use it for what you want to use it for. The caveat is that the HUD product allows you to only get 60% of that total amount the first year. They kind of figured out way back in the day that people didn't always make great decisions when they were all of a sudden given $300,000. So in the end, 60% the first year, the rest of it the second year. And that was really to help prevent foreclosures. So I'm kind of curious about the foreclosures that you have currently, because it's pretty rare. There are a couple of examples where you could foreclose on a reverse, but I know
