Mid-February, I posted about a 91-year old widow who was losing her home to foreclosure simply because her husband died. What happened is that the loan officer who did their reverse mortgage (a program that enables seniors to take cash out of their home equity) wrote the loan in the husband’s name only. Mr. and Mrs. Ogle didn’t understand what was happening, because there was paperwork for each of them to sign. They didn’t understand the consequences. When a reverse mortgage is written in only one spouse’s name, if that spouse dies, the survivor no longer owns the home.
Why would anyone do that? Some loan officers set up the loan for the oldest person so they can get more cash out. In the case of the Ogles, Jeanette didn’t understand that she was signing away the home she had and her husband had paid for and lived in together for over 30 years. And now the lender, Reverse Mortgage Solutions of Spring, Texas, was taking the property and throwing the 91-year old out on the street.
I posted and asked folks to write in a complaint to HUD (U.S. Dept. of Housing and Urban Development.) In addition, the AARP and others protested.
March 1st, Kenneth R. Harney, syndicated columnist, Nation’s Housing, reported that Reverse Mortgage Solutions has had a change of heart about taking away Mrs. Ogle’s home. They said they are now “committed to allow you to remain in your home” and will “take no action to displace you as long as the mortgage agreement… is not in default.” Meaning that as long as she pays the property taxes, all is good.
With a reverse mortgage, there is no payment — the company pays you — so the only way it can go into default is if the property taxes are not paid.
Jeanette Ogle said it was the best birthday present she could receive. She got the good news just as she was turning 92.
Mrs. Ogle said, “I’m on cloud nine. I’m staying put in my house. I don’t have to move. And even though I’m 92, I’ve got all my marbles–so everybody should know I plan to be around for a while.”
You go, Jeanette Ogle! We’re all cheering with and for you!
I wrote that in 2009. Fair warning I wish more people had heeded.
The Federal government has shut down 85 websites for preying on vulnerable homeowners through their shady, deceptive ads on Google. No surprise,Google made a fortune off of those fraudulent ads. Now Consumer Watchdog is urging Google to donate that “tainted revenue” to a fund helping out victims of these scams. It remains to be seen if that will happen.
The most common online ad that people suckered for was a scheme that told homeowners to stop paying their mortgages and instead divert their funds to a company that would get them a good loan modification. It included transferring property deeds (ownership) to the scammers. And as if that wasn’t enough, they also had to pay an upfront fee. These home owners were vulnerable because they used the Google search engine to look for a “loan mod” or a “stop foreclosure,” and then clicked on the ads that showed up.
Like I said, “Stop clicking on mortgage ads.” And that includes those ads that offer an impossibly low interest rate to home buyers, too.
I’ve looked at those amazing, rock bottom rates, and invariably, the fees are so high, it makes no financial sense whatsoever. With rates so low now, borrowers are better off paying no points and one (reasonable) flat lender fee. Some of the deceptive interest rate ads show up on good, legitimate websites, so don’t be fooled.
Feel free to post a comment. For more details about the Google ad bust, see here.