Fighting to prove reverse mortgage was obtained fraudulently. Any advice?
My 87 year old grandmother was diagnosed with dementia in 2007. She passed away January 30th 2014. The reverse mortgage application was submitted late December 2013. Loan was approved and funds were wired to her account January 3rd on that same day, my aunt (her daughter) withdrew a portion of the money, 8 days later, she withdrew ALL of the remaining money. My aunt lived with my grandmother and was her power of attorney. She had access to all of her personal information. I also discovered that the counseling was done by phone. I truly believe it was my aunt who conducted the interview. She doesn't work and has lived off my grandmother for years. The time in which the loan was obtained, and my grandmothers passing are so close. I suspected fraud immediately. I intend to fight till the end to clear my grandmothers name, but does it seem as if I have a strong and valid case?
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I'm putting money on the theory that the counselling session on the phone was recorded. That can probably be subpoenaed.
This kind of garbage goes on all the time within families. It's not unusual. I'd advise you to seek out an elder law attorney, and see what (s)he has to say about it and what your next steps might be.
Or if your Aunt had already sold the house, then the mortgage company had already been paid back. No harm.
I think some people believe a Reverse Mortgage is free money, that it is coming from the equity in the house.... it's the equity that helped qualify for the *loan*, and it was the mortgage company money that was going to your grandmother.
As for clearing your grandmother's name, besides the mortgage company, only you and your Aunt know about the Reverse Mortgage. Or was something published in the media?
If, for instance, she left the house to her grandchildren, well, there'll be a home to sell and a mortgage to pay off from proceeds.
If she had it in trust for the grandchildren, same thing. The grandchildren would inherit the house as the contingent beneficiaries, and they'd be left with a house to sell and a mortgage to pay off from proceeds.
Even if you proved fraud, chances of actually getting that money back may still be slim. From what I'm reading about reverse mortgages, the maximum amount available for lending would be 80% of value. And the maximum one would be able to access in the first year would be 60%. nolo/legal-encyclopedia/reverse-mortgages-retirees-seniors-30277.html
If auntie and uncle were the inheritors of the house, no harm no foul. *shrug*
I still don't understand why gram's name needs clearing. Auntie and uncle were her children. If they've benefited from the reverse mortgage, and it allowed them to be happy just walking away from the house? They're actually pretty crafty.
It's not as if a reverse mortgage lets them borrow scads of equity out of the house. Maybe they needed that money to live on and support gram....?
With RM's, the debt service on them is very high. Sounds like the RM was done as a lump sum payment situation which has the highest fee structure. Do you have a copy of the RM agreement? You need to clearly read what the agreement was for. For HUD underwritten RM's, if you want to keep the house, you have to let the RM know within - I think - 30 days of death your intention on the property and then be able to within 6 months come up with the ability to be able to pay 95% of the FMV of the home under RM revised rules done in 2012. So would that be feasible? Feasible on your own $ without getting any $ back from your aunt & uncle? If you don't, the RM holder really doesn't care about whatever squabbles within the family or if auntie committed fraud (this probably will be hard to prove), they will seize the property - as probably is their right in the agreement - and place it on the market to sell. If she died 7 months ago, the window of opportunity on what you can do is limited now.
If your aunt was her POA, and the POA included finances, then she had the ability to do an RM for her as well as take all her $ from her account. Do you have a copy of the POA and what does it allow? Now was her taking all the RM $ ethical? not really but probably within her POA ability. The bank allowed auntie to do the withdrawal, so her signature was on the account.
Could APS be called in on this? Probably, but with grannie being dead, case closed as she cannot be interviewed or evaluated.
Would the AG's office be interested in this? For your aunt, not really. The AG would be more interested in going after the RM group for not properly vetting the RM applicant. You should look to see if the RM group is one which either your states AG's office or other states have gone after for consumer fraud.
Was an RM a good thing for an 87 year old to take out, definitely not but people take RM's out every day without truly understanding what they are doing. You would have to prove in court that the dementia was to the point that she was incompetent and not cognitive to make any decisions. It is hard to find doc's who will state these things for guardianship hearings and probably even harder for an after death situation. And then prove that auntie did all she did with malicious intent rather than just being simple or greedy.
Is there a valid will and are you named executor in the will? If not, then you are just a heir and whomever is named executor really needs to be the main point person on all this. You can be the one paying all the legal costs, but the named executor needs to take the lead. It is not going to be easy whatever you do.
So, you need to contact a lawyer, and maybe the police. Get all your documentation in order to back up your claims. Do you know what your aunt did with the money? If she still has any of it, you may be able to get it back eventually. But you must act fast.
POA was daughter & caregiver for her 87 yr old mother. Who knows for how many years as POA or for providing care, but if grannie was diagnosed in 2007, that alone is 6 years. A huge period of time to be a caregiver for someone with dementia. This site is filled with stories of just how difficult caregiving is for any period of time for those with dementia and aging. Was daughter being paid for caregiving? How were household expenses being paid? funeral & burial? who took the time and spent the costs to take her to doctors, etc? Debts? Were they at the bottom of their purses for funds and did the RM to make ends meet? Was the RM done to be able to compensate for caregiving or to repay for things the daughter & her hubs paid for? RM's seem to be done often when folks have themselves against a wall in needing funds with limited options. Did grannie need the RM $? We don't know what $ situation was for years & years.
POA's allow for a lot of discretion in actions, often for things that others within the family do not agree with. But that often is why a parents selects them over other sons or daughters or a nephew. Did anyone file an APS or other action, like file for guardianship, that showed prior concern that daughter was not a suitable POA?
Although it seemed initially odd that the daughter left, but perhaps not. If she was 24/7 caregiver for years in the home and then mother finally died, why would she need to stay at the home? Could daughter be emotionally & physically done, finished, put a fork in it and there's no cleaning up of the kitchen or cutting the yard ever again…..
Usually parents leave in their will, their assets to their children as heirs first. It seems odd that mom left her assets to a single grandson. But could be how the will reads.
But if there is no will, then most states have it such that all assets escheat to the state. Family has to establish lineal heirship to get the assets transferred to them; daughter and her siblings are in position #1 as a lineal heirs equally. If there was no will and no assets except for the house, then what they did with the RM was actually pretty clever as there now is nothing for an estate so no need for probate. They can let the mortgage holder deal with it.
It would be interesting to get details from both sides…...
Even back then, my aunt and uncle lived with my grandmother rent free
(my uncle lived there on/off). They're not employed and have been receiving public assistance for years (both have had issues with drugs). Monthly expenses were being paid with my grandmother's SSI.
The funeral and burial were paid with life insurance. Although, my aunt was the main person taking my grandmother to doctor visits, does that mean she should be compensated financially? I don't believe so! especially since she's had free room and board for many years....that's the least you can do for your mother!
As for providing care, my uncle was the person being paid by an agency to care for her, which I didn't understand why he would be elected as the caretaker...probably because that added income would jeopardize my aunts welfare check? It just saddens me that, my grandmother's worries regarding her home have become reality!
She never benefited from this RM for any extra medical care etc.., no money was put into the home for upkeep. I think they split the money and were willing to let the bank take the home, unaware of the Will.
Good luck..
Q, if you really feel that the women-folk should just work for free as a caregiver & should be just grateful to get free room & board you probably are not going to get much empathy in this. Ditto for your being upset that they left the house that you are supposed to inherit dirty.
I wouldn't be surprised if that old secret will done in 1993 was replaced by another with your aunt & uncle (the caregivers) as the heirs. 20 years is a long, long time and who grannie favored back then could have changed over time. Aunt was named POA after all. There is going to be a good deal of money you will have to pay for discovery on all this. Pam is right, you will need hard evidence and doing discovery is going to have a pretty good paralegal costs alone.
Was grannie on Medicaid or on any community based state subsidized program? If so, the states MERP program will have a claim or lien on the property ahead of you. Emotions aside, it may not be worth spending time & $$ on all this if that is the case.