[Genquire-users] NUMBER ONE Success System

Tommy Lee noss1233 at gmail.com
Wed Aug 22 07:31:15 EDT 2007


For older borrowers (typically in retirement), it may be possible to arrange
a mortgage where neither the capital nor interest is repaid. The interest is
rolled up with the capital, increasing the debt each year.

These arrangements are variously called reverse mortgages, lifetime
mortgages or *equity release mortgages*, depending on the country. The loans
are typically not repaid until the borrowers die, hence the age restriction.
For further details, see *equity release*.

Interest and partial capital

In the U.S. a partial amortization or balloon loan is one where the amount
of monthly payments due are calculated (amortized) over a certain term, but
the outstanding capital balance is due at some point short of that term. In
the UK, a part repayment mortgage is quite common, especially where the
original mortgage was investment-backed and on moving house further
borrowing is arranged on a capital and interest (repayment) basis.

Foreclosure and non-recourse lending

In most jurisdictions, a lender may foreclose the mortgaged property if
certain conditions - principally, non-payment of the mortgage loan - obtain.
Subject to local legal requirements, the property may then be sold. Any
amounts received from the sale (net of costs) are applied to the original
debt. In some jurisdictions, mortgage loans are non-recourse loans: if the
funds recouped from sale of the mortgaged property are insufficient to cover
the outstanding debt, the lender may not have recourse to the borrower after
foreclosure. In other jurisdictions, the borrower remains responsible for
any remaining debt. In virtually all jurisdictions, specific procedures for
foreclosure and sale of the mortgaged property apply, and may be tightly
regulated by the relevant government; in some jurisdictions, foreclosure and
sale can occur quite rapidly, while in others, foreclosure may take many
months or even years. In many countries, the ability of lenders to foreclose
is extremely limited, and mortgage market development has been notably
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