A Risky Lifeline for the Elderly Is Costing Some Their Homes
The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.
Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.
Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.
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My mother in law did a reverse mortgage.Her son conned her into it so he could embezzle the money. To make a long story short the lawyer brought papers for her to sign. A big stack. She is functionally illiterate. I tell the lawyer she can not read. He could careless and continues anyway. She had 40k left to pay. She signed a note for 675K and only got 325 K. Not exactly sure how that works where yo sign a note and get about half of what you owe.