Financial decisions can have consequences that outlive the people who make them.
In the case of three women, two in South Philadelphia and one in Delaware County, the decision to take out a reverse mortgage – a special kind of loan that allows borrowers 62 and older to convert a portion of their home’s equity into cash – has made their lives a nightmare.
All three were younger than their spouses and not yet 62, which meant they did not qualify for these mortgages and could not be co-borrowers. Their names were removed from the deeds so their husbands could qualify.
Once their husbands died, and, in some cases, even with their names back on the deeds, they faced foreclosure because the law allowed lenders that option.
Ruth Guerriero of South Philadelphia remembers the day she got the letter that “scared me to death” – the one threatening to foreclose because of a reverse mortgage she didn’t know existed.
She was sifting through the day’s mail at her dining room table in one of those postage-stamp-sized brick ranchers you can see from I-95. It had been 17 months since her husband, Alfred “Big Al” Guerriero, died at age 89, and she was still getting Mass cards from friends.
But this piece of mail in early October 2013 was from OneWest Bank, informing her that it was foreclosing on the house in the 2800 block of South Hutchinson Street that the couple had bought in 2006 for $200,000. Without her knowledge, Guerriero said, her husband – 23 years her senior – had taken out a reverse mortgage in September 2007.
To clear the way for the mortgage but without telling her the real reason, her husband asked her to remove her name from the deed, Guerriero said.
“He said if I did, our property taxes would be less since he was older.”
Because her name was neither on the title nor listed as a co-borrower on the reverse mortgage, OneWest insisted that Guerriero, now 69, had no claim to the house after his death.
Read more at http://www.philly.com/philly/business/real_estate/20150728_Reverse-mortgage_nightmare_can_start_after_borrower_dies.html#1jVewy6rD5kI0PMz.99