Reverse Mortgages Doing Damage From Beyond the Grave
Here is an article from the New York Times on reverse mortgages. The article focuses on the damage done to children after elderly parents take out reverse mortgages so they (the parents) can stay in the home as medical care costs begin to increase. Many times, the children lose the home as the mortgage companies look to foreclose on the property soon after the owner-parents die.
While the article has some quotes from lawyers, they are lawyers for consumer affairs and the mortgage industry. What I found lacking was any discussion about the failure to consult lawyers about long-term care planning before taking out the reverse mortgage. The article does a poor job of reporting that taking out a reverse mortgage was far from the only option the parents had to “age in place” and pay for home health care or aides.
By the time the situation gets as far as the parents dying and the kids trying to save the home, it’s too late. The damage is done and it’s largely about salvaging the scraps. If the parents had consulted an elder law attorney before they spoke to a reverse mortgage salesperson, the home would have been saved and the kids wouldn’t be forced to come up with 95% of the market value to pay off the reverse mortgage company to stave off foreclosure.
There are lots of reasons why people don’t consult an elder law attorney before taking action. Sometimes it’s because they don’t want to pay money, sometimes it’s out of ignorance that an elder law attorney can help, many times a combination of the two. We see now the consequences of that failure to consult a lawyer.
Don’t let it happen to you. The small investment you make in planning and counseling today can save hundreds of thousands of dollars for you and your children. That’s not overstating it – we do it everyday for clients.
Posted by Victor Medina, Medina Law Group, LLC