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Reverse Mortgages Part 1

Inevitably, you’ve seen the commercials on TV – an elderly, approachable spokesperson, often times a celebrity, pitching the merits of a reverse or senior reverse mortgage. Tap into the equity of your home, use that money for whatever you need, all with the added benefit of minimal payments. With retirement funds shrinking, the rising cost of medical expenses, and unforeseen emergencies, a large amount of money readily available sounds like a promising offer for many Americans. And while a reverse mortgage in theory can be a beneficial experience, in reality, many homeowners are facing foreclosure, oftentimes over a technicality.

Having dealt with plenty of these cases, I’ve noticed a common theme – the reason for the foreclosure and the underlying documents are oftentimes on flimsy grounds. Let me give you an example. One of our clients took out a senior reverse mortgage with his now deceased mother. The mortgage listed the mother and the client as “mortgagors” and very clearly stated that the reverse mortgage was being granted to both individuals. One of the ways a bank can foreclose on a reverse mortgage is when all mortgagors pass away or no longer reside in the property. Remarkably, once the client’s mother passed on, the bank sued and tried to foreclose – despite our client, a surviving mortgagor, still living in the property! The reason they argue, is because the son, our client, was never meant to be a mortgagor. This is a ridiculous position for the bank to take, because the mortgage specifically says our client is a mortgagor. The terms of the banks own mortgage state that they are prohibited from foreclosing while our client is still alive and living in the property. To no one’s surprise, that hasn’t stopped the bank from trying.

Thankfully, we’re helping our client defend his case against the bank for a wrongful foreclosure action. Unfortunately, elderly Americans are lured in with the promise of easy, additional money to supplement their lives, without knowing the dirty little tricks the banks play, all to increase their bottom line. If you have a reverse mortgage and are facing a foreclosure action, reach out to Loan Lawyers today, and let us help you retain your property.