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I recently found out that my ailing aunt who suffers from dementia was pressured to take out a reverse mortgage on her home of 25 years by a telemarketing co that seemed to have targeted her. They scared her about how much maintenance will have to be done to upkeep the property.
She had less than $40k left to pay on the original mortgage on a property currently valued at just over $500k. Now, a few years later, as I'm looking at things for her, she owes almost $500k on the property. As it stands, if I'm understanding the paperwork correctly, the house will now go to the bank when she dies. So, her family has effectively lost its only asset and she never told anyone or fully understood the process. This paperwork is so confusing that I don't even understand it.
I'm sure this is common. Is there any course of action that she can take here? Does her family just need to chalk it up as an expensive lesson? These things should require someone to translate every page into layman terms before a senior citizen is allowed to sign off on it.
@thebreeze wrote:I recently found out that my ailing aunt who suffers from dementia was pressured to take out a reverse mortgage on her home of 25 years by a telemarketing co that seemed to have targeted her. They scared her about how much maintenance will have to be done to upkeep the property.
She had less than $40k left to pay on the original mortgage on a property currently valued at just over $500k. Now, a few years later, as I'm looking at things for her, she owes almost $500k on the property. As it stands, if I'm understanding the paperwork correctly, the house will now go to the bank when she dies. So, her family has effectively lost its only asset and she never told anyone or fully understood the process. This paperwork is so confusing that I don't even understand it.
I'm sure this is common. Is there any course of action that she can take here? Does her family just need to chalk it up as an expensive lesson? These things should require someone to translate every page into layman terms before a senior citizen is allowed to sign off on it.
Reverse mortgages are just like regular mortgages - there are bad ones and good ones.
How in the world can she owe $500k? That is $50,000 per year for 9 years.
How long has she had it?
How much cash did she pull?
In a normal reverse mortgage, it is just like selling the property when she dies.
If she owed $200k, that is what is due on the house.
The heir could get a normal mortgage, pay the $200k, and keep the house or sell the house and pay the $200k and keep the rest.
All reverse mortgages are not bad.
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@thebreeze wrote:
I never said all reverse mortgages are bad. However, when a company calls a senior citizen and then scares them into a financial agreement that wasn't necessary, it's predatory.
Of course.
How much did she get at closing?
How much is left?
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@thebreeze wrote:
She took out 250k. She has roughly 50k left. She donated a chunk of it and got some major repairs done + helped friends out with the rest.
What was her interest rate?
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