The Life Expectancy Set Aside, also known as LESA, is a guideline implemented by the government to require some reverse mortgage borrowers to set aside funds from the reverse mortgage to cover taxes and insurance for the life expectancy of the youngest borrower. The LESA can be an important aid for some borrowers who may have trouble keeping up with tax dates and insurance requirements. After all, not keeping current on taxes and insurance will result in a default on the reverse mortgage.
The LESA may be either a requirement or an option depending on the borrower’s ability and willingness to pay taxes and insurance in a timely manner. The standard look back for this determination is 24 months. Unless there are extenuating circumstances, a poor credit report and or delinquent taxes can often make the LESA a requirement for the reverse mortgage.
For many borrowers, the LESA can be comforting in that the lender will be paying their taxes and insurance in a timely manner with funds that have been set aside at the onset of the reverse mortgage.
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