If dad takes reverse mortgage, will that screw me out of being paid?
so dad has a new plan. ( i could strangle whomever is telling him this stuff!) but ive caught wind that dad is considering a reverse moratgage. i agreed to work here in lieu of monthy payments, id get half this house after he passes. ( yes, im the daughter that has been cleaning/upgrading this house, and i still have to work for my part) lately this house has been falling apart. we got red tagged by gas company and he only repaired just enough to get the gas back on, but its still leaking all outside.my window. i also found out that behind the cheesy paneling in my room is fiberglass insulation. great. that explains my skin problems.
so i can always read him ,when hes acting smug or sneaky, hes done something mean to me he thinks is fun.
hes never been good with money, mom took care of that. when she went into nursing home, he spent over 100,000. of his own money on a time share condo in mexico! got ripped off. 3 years ago i had a credit card ( seperate account,different number my name, he primary) when i was very sick before my surgery id have to get away from here, but any charges i made, i paid for out of my check ( yes i have proof) when he canceled MY card when i was out of town in the hospitol the day before payday, he did it to be a jerk. my card had never been near maxed out. i gave dad cash and i got reciepts when i did. the account was never not paid so it was in great standing when he canceled it. i saw what a jerk he was about the whole thing, i paid mine off completly and closed it. 2 1/2 -3 tears ago. well that his only thing he has to complain about. everytime he talks to sister, she talks him into changinf passcodes so i cant get in. but he forgets the next day, i change it back and he can go online.
now when i was 'conned' into coming here, since brother had several cards in his name he didnt knwo about, i canceled them. i put everything online. i enrolled him in privacy assist so i hes not got new cards, see that hes paying his bills, eyc.. well he bought a toilet for judy so now hes broke. keep in mind the gas company has shut off our services. rather than ask me for help, he refuses to even let me look at statements he has to pick his 'your a mooch piece of shit, the usual. he says hes STILL paying %28 intrest on the amex.. i said no, i paid that card and its closed. in good standing. i printed off his credit report and showed him. that pissed him off. he gets his buddy to change the passcode to privacy assist and that required a lot of digging through several of my accounts to do. ok. so i talk to the guy, explain and ask him to change it back, he did.
sorry getting long. anyway.. hes his 'slick willy' face, the one he gets when he has done something really nasty to me for revenge. he is shockingly unconcerned with house repair. he suddenly cant find his living trust in his safe ( i dont have combo) he still crys poor mouth everyday, but he goes out to dinner with his friends 2 times a week. he buys food for his byddies but none for the house. i buy grocerys, he steals them.( 2 fridges) but none of his credit cards are bad at all, 3 are 0 and inactive. 2 have about 2,000, none are in collections or gone unpaid. but hes still saying hes worried. ok, gather all your bills, utilities, bank statements, any bill you own, put in a pile on table, ill sort it out and put on easy payment plan with the creditors. when i was asking him 'im still getting this house after you die, right? first joyce and i split it ( as in the living trust) but he always assured me that i would get a bigger chunk because i never agreed to give up my livleyhood to be homless! now ive caught wind hes considering a reverse mortgage because that would leave me ass out! can i at least get myself on as a creditor for the large amount of work ive done here? even when hes planning on doing this on purpose because he thinks my work isnt worth anything now. ive kept pictures ,papers, im used to having to cover my butt. sad. what can i do here? sister thinks because im adopted and shes not, that i shouldnt get a dime. im the only one that helped him when he was being abused, im the one that has cleaned/scrubbed/painted/ revamped this entire house. i gave up my sec8 because he assured me over and over, id never be homeless, 'trust him' yeah right. he even calls me theo when hes yelling at me now. that was mom. i was right. he is punishing me for things mom did. but this house has made me sick from mold, insects, gas leaks and fiberglass insulation behind peeling paneling.and i STILL help this house clean. the house wont be worth much because he refuses to let my friend ( i would pay for,hes a contrator) make very needed repairs! so some idiot told him reverse motrgage will give him money now, then kids get nothing. so he can play bigshot, and ill be homeless? i have to find a legal way to get paid here. i did NOT bust my ass cleaning and being treated horribly by this man to walk away with nothing. what can i do legally
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First, it does not sound like a house you would truly want. Do you really want all the headaches associated with a run-down house? Plus, you cannot do much about mold except replace the walls. Heck get a nice apartment and if something breaks, the landlord fixes it -- no mess, no fuss.
Second, there is no house in the world that is worth your sanity or your health. It is a material thing and can be replaced. Your sanity and health are not always easily fixed.
Third, if you still want the stupid house, tell him NOW, you are leaving, moving out unless he goes with you to an attorney's office and adds you, and only you, to the deed and has it guaranteed that you alone get it when he passes. The Attorney should also be able to word it that he cannot get a reverse mortgage with you on the deed. If he isn't willing to do that, then keep your word and move out. Let the others put up with him. I'll bet they put him in a nursing home.
Though if I were you, I'd just leave. You can make a much better life for yourself. You will probably be healthier and most certainly happier. You are stronger than you might think. Heck, you have to be, look at what you've put up with for how long. Many women I think stay in bad situations because they are afraid or think they can't make it on their own. Totally Wrong! Women can and do make it on their own every day. I have never married. I "sewed my wild oats" until I was 26. Then I got serious and got a job and at age 51 I retired fully. That was 15 years ago. Have always owned my own home and rarely financed a car. You can do it. It might be hard and a little lonely in the beginning, maybe living by yourself. But it will be better than living with someone who beats you down every day. You'll make friends and have a life. You'll find some kind of job -- doesn't matter what it is. You'll be able to hold your head up and pay the bills.
One final reason for you to get out of there is you are 46. Do you have an IRA? Since you don't work, I doubt you have a 401K. That house doesn't sound like it will give you much money in your old age. You have to start planning for your retirement and he doesn't sound like he's going to help you with that. If you find a company or a place that still has a pension plan (not many do any more) -- like some government agency, fed or state, you still have time to get vested. You have to also think of yourself. That is not selfish, it is just common sense.
Girl, good luck to you!
RM is debt and has to be fully repaid with ALL associated fees and charges upon the owner of the house death or change in the owners status on the house. You cannot get more than a certain percentage of the appraised value of the home too (oh and the appraisal is a cost added to the RM's fees). If dad dies while still living at the house, the RM is due in full; or if dad has to move to a NH then he no longer is living at the house, the RM is due in full. Once dad dies and you are living at the house, you have no right to continue living there unless you can manage to repay in full the RM. If you can't then you do not own the house and will be viewed as a squatter and evicted. If dad takes out a RM, unless you and Joyce can pay off the RM, neither of you will inheirit the house. It will be sold and the money from the proceeds of the sale go to pay off the RM first & foremost. RM is a loan, RM is a mortgage on the property and has to be repaid in full.
RM for most elderly with homes with extensive delayed repairs likely can't get much money from the RM loan in the first place. FHA backed RM have the % of the $ from the home at a set % which is about 50% of the value of the house. Unless the house is appraised for a large amount of $ (200 - 400K), dad likely isn't going to get very much money for very long. What does the annual tax assessor bill show for value of the home?
Also RM have several items that have to be fulfilled by the homeowner, or the RM agreement will be out of compliance and they RM holder can call-in the loan (has to be paid off in full). The homeowner still has to pay all taxes and all insurance and maintain the property for their lifetime. For many elderly there homes are paid off and they have not maintained adequate insurance as they have no requirements to do so. But if you go and get a new RM, then full homeowners, flood, and any other insurance has to be done and paid for by dad for the full value of the loan. So that old homeowners policy for $ 150 a year is now $ 350 homeowners, $ 500 flood insurance and there will be mortgage insurance also. If dad does not do this, the insurance will get forced placed on the mortgage so the RM will be even more $ owed at the end. Again, if dad does not comply with the RM rules, the RM can get called-in (which means payable and due in full) and if not done, then the RM can be foreclosed upon.
An RM does nothing to help you out and it seems you would have no income to be able to pay off the RM. As a matter of fact, you're doing work on the property is helping dad get a better value on the appraisal with no benefit to you in the long run. As others have said, get out and get out soon. Go apply to get another Section 8 voucher, anything is better than the emotional abuse he is heaping on you and will continue to do till you are a shattered soul. Find the strength & post on this site, we are all here to listen and support you. Good luck!
If your dad gets a RM you will have no legal claim to the house. If he does not get a RM but ends up in a NH Medicaid gets the house.
Cut your losses, you are a hard working person, get a job, even if it is cleaning other people's houses, whatever you can get ASAP. You speak of paying for things, so I believe you have some sort of income. Try to get a section 8 back. Spend your days setting up your new life rather than cleaning your dads house. Once you get an income source and a place set up, move out, leave a note.
Sounds harsh, and sometimes the desire to have family ties us to a bad situation. This house is oxic and so is this family. Move on choose a new "family" of friends that are positive in your life
God bless
My next advice is this. Start updating your resume and your working skills. Maybe go back to working Part-Time. This way, if you end up being kicked out by your father, you have a job and an income to fall back on. Please think ahead. Right now, your father and family are treating you like this because they think you're Stuck. They forgot that you used to have a job and that you can still make it on your own if you Must.
But you know the situation there. Go with your Guts if it is going against your heart and mind.
But there are also some good, reputable reverse mortgage companies out there. For seniors who need some money, RMs can be good instruments. The secret is being very careful. Don't use a company that solicits you and find a company that is recommended by someone else, if nothing else, if you know anyone from a local bank, ask them if they know a reputable company. AARP might even have some good info. Do your homework and find out the pitfalls. There is a ton of information on the internet.
I helped my aunt get a reverse mortgage -- she made the mistake a lot of retirees do and rather than living off and spending only the dividends and income from her money, she spent down the principal. She was in the position of almost having nothing except social security, which was not enough to pay her property taxes in NJ.
I used a broker recommended highly by a woman I trust a lot. The thing is you do not take all the equity (I would say never more than 50% equity) out of the house. Some companies will give the full amount -- they're probably a predatory company and you want to avoid them. You also do not spend down all the money you took out because you need to still pay the taxes and insurance. If you don't pay those things, they can foreclose and you end up on the street.
Hopefully, you will not spend any of the money you get from the reverse mortgage and instead invest it in something that will pay you monthly dividends and income -- which is what we did with my aunt. Yes, you can take a monthly payment, which is easier for you to lose track of where things stand. But if you take a lump sum payout and invest it, and are careful things should be okay.
Being she did took less than 50% equity in the RM, she will still have some value in the house for her son, who isn't helping her -- always one of them! Plus, if you are careful and invest it wisely and only spend the income, there may be principal left to pay off the reverse mortgage.
Also, question all the closing costs and even compare closing costs between companies. Predatory companies will have higher closing costs.
Yes, as said by a couple above, RMs can be very, very dangerous and bad -- there are a lot of predatory companies out there. But it is also a good tool to fall back on when things get bad. Just do your homework and be careful.
To date, RM have been fraught with problems. When Bank of America & Wells Fargo, got out of the RM business totally a couple of years back, what came to dominate the market is the more predatory RM groups. I imagine BoA & Wells flat found out that so many of the RM they were holding from deals in the last decade were underwater and even with getting the FHA money, it was still a bad deal. Nothing like having old peoples homes filled with old people stuff in them to deal with along with a sea of foreclosures on much newer less problematic homes.
It had gotten to the point with RM complaints, that the federal RM rules as of the end of this month are now significantly changing. The biggest change is that the FHA backed RM applicant now has to prove that they can afford to pay for taxes and all insurance for the life of the loan.This could be - for marginal applicants - require actually doing an insurance & taxes escrow-type of account which the applicant has to pay into before RM gets done. It does not come out of the RM money. This requirement alone will excluded a huge # of folks.
The insurance issue is a big deal because so many elders and really most of us...just assume that whatever we pay for hazard insurance is going to be reasonable. Well for folks who have had their home a long time & don;t have a mortgage, they likely have not increased insurance to keep pace with replacement costs. Or they don't get insurance because they have no mortgage so no requirement to do so. Then when they get an RM, the insurance bill which was zero or maybe $ 300 a year for basic homeowners now has gone to having to have increased homeowners, flood, and other hazard (earthquake or windstorm) all of which can be frightfully expensive. Plus mortgage insurance. The fees get to be huge and added onto the RM. For family, paying off the RM when momma dies, just cannot be done. The real tragedy for RM is for family who have been living in the house and caregiving and have no home to go to when the RM comes due. Like Sebring.
I do think that a FHA backed RM can work for a younger couple - say 63 & 65 - who have significant SS & retirement & have a home worth at least 300K which is fully paid off and in an area which is showing significant increasing value. FHA limits the % you can take, it's based on house value & about 50-55%. They do the RM as a line of credit. They plan on staying at the house for another decade or two and the house will increase in value so that when it sells, the RM is paid in full and there is still $ left over which goes to the now truly elderly couple or their kids. But if you are this couple, you can go and get $ from a bank or do a HELOC and don't need to do an RM in the first place.
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