Katsmihur Asked December 2022
Mom received final notice of occupancy from reverse mortgage company. What happens if she doesn’t reply?
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Neighbor texted me saying he pulled the letter from her front door. Should I make contact with them because her reverse mortgage was sold to a different company earlier this year. The original company had the POA copy and my contact info. I thought they would have contacted me.
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I’m guessing that they send it to the house so the occupant will be responsible for receiving it.
If no response, the mortgage holder will follow the process to force a sale and any money received from the sale in excess of the debt will go to Mom or her estate.
The POA may have the motivation and ability to get a higher sale price if they sell before being forced to, so you should investigate the outstanding debt, current market value, and likely sales expenses to see if there any equity to maximize.
If she isn't responding to an important legal requirement like this, it seems like it might be evidence of incapacity.
Contact the new RM company with your POA. Ask THEM in writing to report mom's non-resonse even though she is present in the home.
Such a great idea -I hadn’t thought of it that wayBarb! Ty!!!! Activities of daily living are sooo hard for her now.
Yes, do call the reverse mortgage company immediately.
Being this notice is listed as "Final" makes me think that your Mom hadn't paid attention to the previous notices.
Call the mortgage company immediately to make sure it is just an occupancy document.
Yes, it is an occupancy doc that if not signed, loan will default and foreclosure can be initiated.
Will fax my affirmation that mom lives there and the POA.
Rep wouldn’t comment or respond to my question about timeline to return form to them, but said to fax it. I told him mom lives in the house but didn’t acknowledge anything I said to make note of it.
Side doorway is always used and front steps are wobbly so no one uses them. I guess the rep knocked and either she wasnt home or didn’t hear knocking. Yes, weird rep left it in the door.
Neighbor texted me that he pulled it off her door. I really think mom isn’t able to, or has lots of trouble reading, absorbing and acting on paperwork, thus it sits around the house in various states of envelopes being unopened, opened and papers removed. Unfortunately she trusts this neighbor and probably asked him to open it. Same neighbor who shooed away the window salesman, and promoted his wife’s window company, trying to wayyy oversell mom for windows not needed. DH is a retired carpenter and has replaced many house windows in his life.
Guess my next step is to try to get her to complete the form and fax it. That will be almost impossible.
Follow up with the form as soon as possible, of course.
Can you set up informed delivery with the post office so you can have a chance to see images of mail pieces that are being delivered?
Have not heard of informed delivery. I am definitely checking this service out. Thank you for this info.
But something FreqFlyer touched on us important, your mom has to make sure that “occupancy” is the only issue. The RM has other items that must be satisfied for the RM to stay in force in addition to FT occupancy. She has to be current on property taxes and be fully insured with homeowners policy and any other hazard policy needed for your area (like flood, windstorm) AND maintenance and necessary repairs done on the property. I’d be concerned that if there are issues in using the front door and it’s obvious that this becomes an issue for the RM. That if they find this out as the process server who left the Notice wrote any of this up in his delivery of service report, that RM will send out someone to do a evaluation on condition on the property.
RM can be ruthless on calling in loans. They DNGAF what the occupancy is if there can be another reason to call in the loan.
After Hurricane Katrina, couple of our friends had parents in the Lakeview area of New Orleans with RMs. This area built in 1950’s and mainly slab on grade. LSS it flooded 6’ -14’ and stayed flooded for weeks & it was around Thanksgiving when it was kinda drained. RM sent out letter #1 & #2 to the property address which were returned undelivered to RM. Letter #3 which got forwarded basically was a 30 day demand letter to provide to the RM in detail all info on insurance claim, details on repairs status and with contractors info, info on utilities. It was chaos and no way to do any of this. The RM had zero interest in dealing with any Katrina drama or hear tales of woe from elderly parents or their kids and RM were going to foreclose. To cut losses and foreclose is their playbook. Please please realize this & watch what you or your mom let them know about.
If the current housing market drops out, and if your moms place is worth way less than the RM could ever get to repay their lending, imo, they are going to want to dump that property asap. & can find a reason to do this.
Thankfully her place is worth more than the original RM amount, so that’s good, even after repairs are included.
UPDATES: 1. Contacted RM today to tell them to be on the lookout for my email and fax of POA and certification letter that the property is Mom’s primary residence since inception of the RM decades ago. 2. Set up Informed Delivery of moms mail. 3. Called electric company and getting access to account. 4. Left message for lawyer to call RE next steps. Difficulties in mom’s handling her affairs is very apparent.
That POA paperwork should have transferred with the mortgage and had the mortgage companies done their due diligence, your mom would not be in this emergent situation. It's not her fault, it's malfeasance on the part of the selling and receiving mortgage companies. Wall Street does not care, it's all just commodities trading to them.
Wishing you the best in pulling this back from the brink.
I see us further away from the brink each day.
PS. DOCUMENT! DOCUMENT! DOCUMENT! Every call with an email saying here’s what was said, every fax with a receipt the fax went through, every mailed letter with USPS confirmation.
Next to work on is property and school taxes which I am sure are unpaid, as well.
Mom admitted she was dizzy yesterday, had not eaten in a couple days and wouldn’t rise from her bed to eat. Called 911 today, ambulance took her to the ER where we remain waiting for an admission bed.
Someone will speak with me regarding nursing home placement, as they see she is unable to care for herself and cannot return home.
Social work consult at hospital, changing locks on doors as neighbors and brother(?) have keys and bagging rotting food and trash today.
I thank God my prayers were answered, that mom did not become a victim of violence because of her vulnerability.
I know this has been brutal on you but, you have done a hard job well.
I pray that your mom gets the care she needs, adjusts well to her new home and you find peace and can just be her advocate and not her scratching post.
I broke down when the rescue team entered. Felt the culmination of concern and frustration coming to an end.
I think she will now get the care she needs. I hope she accepts the new arrangements, but don’t expect it. Thank you for the continued prayers.
If that is the situation, spending anymore time or energy or $ on the home is no longer her responsibility or yours as her POA as she has defaulted on the terms of the Reverse Mortgage by not maintaining the property and by not paying the property taxes. And once she moves into a NH full time she is in default on the other requirement to live in the home as well. The RMs have subcontractors who deal with properties in all phases of disrepair and damage. It’s not her responsibility once she defaults on mortgage terms,
RM that are HECM / HUD are federally guaranteed. So if the RM somehow looses $ on the deal they did on your moms house as she didn’t do maintenance, didn’t pay taxes, did hoarding so lots of reno needed, etc, then HUD fully makes up the difference with her RM. Read that again, HUD covers the spread so to speak! Paying her delinquent property taxes makes zero sense to do. If the place is blight noticed by the City, HUD will pay for the RM to have the place to be bulldozed, it’s an ICC program that HUD, NFIP, couple of other federal programs can tap $ from to do Increased Costs for Compliance aka ICC when something goes especially nasty eg flood. (ICC $ from Katrina, it paid anywhere from $8k for venting, 20k to be “slabbed”, to $135K to elevate homes). So you paying for stuff is imo a waste of your money. Personally you may want to try to salvage mementos, photos, clothing, reusable items she may need. But if most things are moldy, just leave them.
please keep in mind that if your mom should apply for LTC Medicaid to pay for her NH, she is required to do a copay of basically almost all her monthly income to the NH. She is allowed for most States a max of $2,000 in non exempt assets. So any outstanding bills over 2k she will not have the $ to pay. That attorney will expect to be paid & I’d suggest you make his bill a priority.
It would be time (sorry more work) to -- after legal advice about what steps and documentation to take -- find a realtor to sell the house if it is worth more than the RM. Those funds, the fees from the relator's commissions, any legal fees; should be paid from your mom's funds including the funds from the sale and at closing the policy value of the RM can be paid off as part of the settlement. Any funds remaining thereafter would go to paying her monthly nursing home costs; ditto for any other assets she may have (?).
Once her assets are spent down to below the limit required for your state (most states are around $2K total); then she can apply for Medicaid coverage of her long term care costs. But best to get with a licensed elder care attorney in your state to map out all of these steps. The nursing home where she is placed can also be helpful, and may have recommendations on elder care lawyers they are aware of and with whom they may have previously work on similar Medicaid spend down and application processes for residents.
Getting access to all your mom's accounts (bank, Social Security, Medicare, IRA or retirement, any insurance policies, utilities, etc.) and setting them up as on-line will make it easier for you to handle the paper work (including filing her taxes) moving forward.
As others have said; document, document, document everything you do including notes from any conversations and keep receipts for any and all expenses paid for her. Yes many expenses can be paid from her funds as part of the Medicaid spend down including the legal fees and pre paid death/funeral expenses, the elder care lawyer can help you with that; what to pay from her assets and before applying to Medicaid.
You have done so much great work and this is not a fun journey to be on. Few have much knowledge about this journey until the trip has already started and may be mid course. Best of luck!
you mentioned in the past you thought house worth more than RM.
There are lots of fees atop the interest. I’d be concerned that as your mom wasn’t perhaps cognitive all sorts of fees added onto her old mortgage. And then fees for its placement with a new RM service holder. That process server who placed the Notice on her front door had fees and expenses that were attached to her RM. You want to make sure the figure you get is the latest $ amount owed by your mom.
You have a lot to deal with right now In her being hospitalized and eventually placed into a NH and dealing with her home. But realize the RM have a very narrow window for the elder to buy their home back from the RM. She went into default on the RM, they can foreclose. Your mom is still alive and it’s a slightly different situation than a heir wanting to buy their deceased parents home who had a RM. Whatever the case, it’s going to need to be bought pretty much as if it is a cash sale. It will need to be appraised as it can be bought at 95% of appraised value - even if less than the RM - as HUD / HECM RM will cover the difference. But if you want to buy the house, you need imo to have the $ to be able to buy it as a cash sale & asap, probably within 30-90 days. You need to have $$$ to buy it at 95% of appraised value.
if mom / you want to put it up for sale, like with a Realtor, clearly get the information from the RM as to the timeframe allowed to do this. It could be pretty narrow. Like 90 days or even less to have it on the market and it needs to be listed with a Realtor that does these type of deals. So no FSBO nonsense. Remember the RM can totally foreclose, it holds the upper hand.
Your moms house sounds real challenging. Like I’m picturing a hoarder house with lots of serious maintenance issues… front door cannot open. It had rotten food and utilities shut off. It’s not move in ready and not getting that type of buyer & that $$$$. If it was cited and tax delinquent; it’s a hinky address to get permits pulled. Sometimes it’s best to just walk away, just sayin’.
I wouldn’t say a hoarder’s house, but cluttered and rotting food (removed today!). No serious maintenance issues, but deck and front steps removal, facia replacement on garage, fence and driveway repair. Not move in ready.
Seems to be a blessing I didn’t see property and school tax bill till the other day. Happy not to pay that 4K!
Taxes $ 4,000. And another property tax bill coming due. More $$$. Placing your mom into a facility, may mean she will need to put up a hefty deposit to get a bed in a SNF/NH. Mom/you many need additional elder law attorney work done. All this has co$t$.Unless mom has a significant amount of money or you personally do and will be private paying for her stay in the NH (7K-15K a mo kinda average), it may be better to hold off on paying those taxes. It’s already delinquent… might be easier just to it get paid from Act of Sale.
Please please please realize that RM absolutely DNGAF in allowing an elder or their family or heirs to drag out for months and months a pay back of the RM. HUD backed HECM have to allow family an opportunity to buy the property but the window is narrow. Find out exactly what the timeframe is they have for you / mom have to be able to buy the house and close the deal. If it’s 85 days from now, that’s mid April. If you find it’s $321,000 RM payoff and you do not have 321K liquid in the bank and absolutely do not have the ability to get a personal loan for 321K as you do not have the collateral or creditworthiness to do this, step back and let it go. I know this sounds all ruthless and harsh, but I’d hate to see you go another couple of months, pay 4K taxes, another 10K on repairs, find even more repairs needed so more $$$, there’s an issue with Medicaid so NH wants 2 months private pay to keep mom so that’s 15k, there’s something else and you end up not having all the $ needed to pay off all the RM….. it goes to foreclosure. Really have a heart to heart frank discussion with your husband on all this & perhaps someone else you trust to get a more clear eyed perspective on the situation.
RM have a whole system to how they manage the end of the mortgage via a foreclosure process. They have subcontractors that post the Notices, do drive by photos on the condition of the home, run a courthouse search, etc. Like that process servicer who came to your moms house to leave the Notice works for a number of mortgage companies or debt collection companies or law firms and his bill will be in your moms foreclosure bill. They will be nice to you & mom, but the terms of the mortgage contract are in their favor.
Good luck on this. & try to not let this get you too too overwhelmed.