What Is A Reverse Mortgage LESA
What Is A Reverse Mortgage LESA:
A LESA is not a person, it’s basically an escrow account set up by your reverse mortgage servicer to guarantee payment of your real estate taxes, and homeowners’ insurance. A Life Expectancy Set-Aside (LESA) is, integrated into the Home Equity Conversion Mortgage (HECM). It then safeguards homeowners from possible default by setting up a mandatory escrow account. Although a LESA can be voluntary, lenders typically require these when an applicant has shown an inability to manage real estate taxes, and homeowners’ insurance payments. 1. Utilizing the LESA allows lenders to approve a reverse mortgage where they might have otherwise declined the loan. 2. So LESA’s ensure that borrowers can get reverse mortgage approval but also manages the critical payments for property taxes and homeowners’ insurance by preventing possible default for nonpayment of those expenses. 3. While it secures your financial obligations, it also reduces the available loan proceeds to you at closing. and 4. Once established they cannot be removed unless the loan is refinanced. THE LESA funds remain in the home’s equity without incurring interest charges until disbursed for payment of taxes and or your homeowner’s insurance.