A reverse mortgage stole my inheritance
March 8th, 2007 by Mark Flanders“But mom, you’re spending my inheritance!”
I was dumbfounded and shocked to hear my client’s daughter almost shout this at her mother in my office. I had to struggle to regain my professional demeanor. It took me several moments. The mother said nothing. The daughter sat back grumbling about her mother’s insensitivity with no apparent embarrassment. My client was in my office to apply for a Reverse Mortgage.
There is a curious and distasteful dynamic that sometimes happens when an elderly couple or individual attempts to get a reverse mortgage. A loan officer is often witness to the greedy side of human nature. The adult children of elderly parents can be cruel and grasping. They view reverse mortgages as something being stolen from them. They treat their own parents as the thieves.
I learned a long time ago that it is better to keep my mouth shut when my temper is up. And with my loan officer hat on, I don’t feel that I have the luxury of making remarks about a person’s personal set of values. So today, because this is my blog, I will use it to try and rid myself of the unpleasant aftertaste this meeting left in my mouth. With that in mind, here’s a piece of my mind.
The equity in a home does not belong to the heirs while the parents are alive. It may be a gift after they die; it may not be. The equity in the house is something the parents worked for; not the children. The parents’ quality of life when they are elderly, is often reduced because of rising costs and falling incomes. Often, the only asset the parents have left to work with, is the home. The children can either support them now financially, hoping to get the house afterwards, or use a reverse mortgage to make life easier for everyone. The parents are often trying to not become a financial burden on their children. The parents are not trying to spend or give away anything, they are trying to survive with some small comforts.
It must be very difficult to maintain any sense of dignity while getting older with family members who behave this way. My client is a nice, older lady with clean clothes that are not new. She smells of soap. Her grooming is tidy but there is no hint of makeup or hair color. I doubt she can afford those things. She has a soft voice and soft hands. Her husband is gone. She gazes at the floor alot.
My client brought me cookies today and stated “You’re a nice young man.” I grinned at her, I’m 48. We chatted about her garden and the gardener’s spring ritual. She said she would bring me some bulbs she needs to divide this year. We did not speak of her daughter’s outburst. My client has decided not to pursue a reverse mortgage.
Writing can be therapeutic. But this time, I know that the visitors who would benefit the most from this article, are the ones least likely to finish reading it. Sometimes I don’t like my job very much.
Share on Facebook
No related posts.
Tags: kitsap real estate blog, kitsap reverse mortgage, reverse mortgage, wa reverse mortgage
I cant believe this product is still being sold. I’d put reverse mortgage on the same level as leasing a car. Not smart, but they get tons of old people to do it anyways.
My grandmother recently died and my grandaddy is in a nursing home. Their daughter which is my mother managed to get a key to their house. She went in today and helped herself to my inheritance
my grandmother had left me. She stold my inheritance. I am devastated.
I would like to know if a non-borrowing spouse signs off the reverse mortage, are they able to remain in their home if the borrowing spouse, dies, leave, or divorce?
Wow Jan! That’s perfect!
It’s direct, it cut’s right to the heart of the matter, it keeps the parents from having to confront the child(?), and it would have to stop the child(?) in their tracks!
Thanks for the suggestion. I will definitely add it to my list of practiced scripts. As you stated, the delivery is important. But I can handle that part.
I’m not sure how everybody found this article, but I sure am glad you did!
Hello! I have also worked with reverse mortgages for several years- until recently I provided the required counseling that borrowers must get before they can do the loan. Gratefully, I found that the majority of adult children were very supportive of their parents. But like you, I did come across a few who were very opposed to it- almost always because they wanted the house or the money from it when their parents died. I was taken aback the first time it happened, as you were- it is indeed shocking to watch an adult child bully a parent! But the next time it happened I was prepared. Whenever a child repeatedly objected to the parents getting the loan, I would very calmly ask, “Okay, you know your mom and dad need an additional $500 (or whatever) per month just to make ends meet. Will you give them that $500 every month until they die so they won’t have to get this loan?” Invariably, the answer was “No, I am unemployed, that’s why I live with them” or some such drivel. The “man” in this case had been unemployed and living with his parents for 6 YEARS! As I recall, the parents called back later to thank me for asking this one question- they had supported this 50 something son all their lives and it never occurred to them that he should be helping THEM now. It’s a simple question, and if you can manage to ask it in a way that is not confrontational, it sometimes helps to put the brat in his/her place AND give the parents back some of their power to see the situation more clearly.
Steve: Ahh, that explains the mystery. The internet makes the world a smaller place doesn’t it?
I subscribe to Google Alerts so whenever the term “reverse mortgage” shows up new on the Internet (blogs, press releases, media articles), I get an email with a link to it. That’s how your blog came to my attention. From just the title, I assumed yours was going to be another negative article about RMs. Pleased to find out it wasn’t.
I usually respond to the negative ones with either a correction of their misinformation or a litany of RM benefits to counteract the author’s overstating of the negatives. It’s a continuing educational process, especially with the cynical media, isn’t it?
Steve: Thanks for your feedback. It’s good to know people are reading. You are probably right about the title. The greedy mortgage brokers rank right up there with attorneys, don’t we?
Excellent observations. There is nothing written that says we are required to leave something to our children, particulary at the expense of living meagerly in our own “golden” years. What’s the selfish daughter’s inheritance going to be when mom loses the house because she can’t afford the additional burden of an equity line or second mortgage payment just to keep up with increasing taxes and insurance, assuming mom could even qualify for one?
Unfortunately, some people will only see the headline title of your article without reading further and will jump to the erroneous conclusion that yet another greedy mortgage broker has stolen a senior’s home by selling them a reverse mortgage.
Mark, what a gentleman you are. That’s a lovely thing to say. Thank you. I visit because I enjoy reading your stuff (and Rich’s too). You’ve not been very active writing at AR lately, so I’ve no choice but to get my “fix” here. So it’s a self-serving thing I’m doing when I visit. =) Keep writing. I’ll keep reading.
LOL @ Brian
What do you mean? Earn her own equity? She can’t do that, she’s all wore out from holding her hand out.
I won’t surprise you with this comment:
Tell her to get a job and leave her mother alone.
Maggie: It is an ugly view. You are left with a feeling of melancholy. Most loan transactions are fun. I get to help people buy their first home or remodel an existing one. I get to help them with their investment dreams and their financial plans. It’s almost always rewarding. It’s almost always upbeat. This time it wasn’t.
Visitors like you make blogging very rewarding.
I know you vistit regularly because you comment often. I wanted to thank you for that. I read once that blogging is an “online conversation”. I think that describes things well. The visitors that leave comments are proof to the blogger that we are not just talking to ourselves. Thanks for being part of these conversations!
Sparky: You are right, we see both sides.
I’ve been thinking about this quite a bit today. And, if I am witness to a similar dynamic in the future, I will speak my mind. I should have this time. My only defense is, I was caught by surprise.
Norm: Ditto what you said…
This article made me cry. It is heartwrenching to think that this woman could be living with less pressures in her life but isn’t because of her daughter’s greed. A person has every right to spend their money and worth while they’re alive. How callous and presumptuous of this daughter to think any of that is hers now OR in the future. I hope her mother has a will and is leaving her assets to a worthy cause. But I’m sure that’s just wishful thinking on my part. I’m glad you’re not seeing this more often, Mark. It’s an ugly view of our society.
How sad to reach the last phase of your life to find that your children are just waiting for you to die.
Cooper: Thanks for your feedback. It sounds like you’ve “been there”. I will count my blessings that this doesn’t happen often. And I’ll take your advice to think about those that I do help.
Jonathan: Believe me if I could have thrown her out, I would have. I thought I should take my lead from my client, so I held my tongue. If I had known this family, I don’t think I would have.
Arleen: thanks for your words of experience. I will remember.
By virtue of the fact that we’re engaged in a relational, ‘people’ oriented business, we see both the good AND bad sides of the human condition. You’re right…there are times when we really don’t like our jobs in real estate. I can so empathize with you. I guess, as one accustomed to advocating for my client’s best interests(in this case, the Mom, and NOT the daughter), I would have probably been somewhat vocal, in the presence of the daughter, by asking the mother some probing questions as to what were the specific circumstances precipitating her need for a reverse mortgage? Knowing you, I’m sure you were fully congnizant of such things. I’ve worked with a enough estate sales to see the dark greed of beloved family members, circling like vultures over the spoils of someone else’s lifetime of hard work. Great article, Buckwheat. Perhaps one of your best to date….
I feel your pain. All to often I have to walk away from a situation where I can truly make a positive diffrence in someones life. Trusted advisor tend to look beyond the reality of the situation and forget that our clients are older and have limited options available to them. The children sometimes have the best intention thinking they can help mom and dad and preserve the equity in the home. Chances are they either really can’t provide the income stream their parents require or using the money to invest in their own retirement plans will be more financially prudent. Unfortunatly greed is greed and there is not much we can do about the children who are more worried about lining their pockets with their parent money then making sure they are enjoying a quality of life they worked so hard to obtain. As professionals we have to face the reality that we can”t help everyone even though we may have the answer. Just remember to keep moving forward because tomorrow someone else is going to need your help.
Mark,
I enjoyed this article and agree with you on all points except one. I probably would have chimed in with my own, probably not professional, opinion of the daughters suggestions to her mom during the app. Unbelievable!
I am surprised the daughter isn’t doing everything in her power to assist her mom so that she doesn’t need to secure a reverse loan.
You mentioned that the client never ended up getting the reverse loan; it would have been justice if she came back and said that she changed her mind and decided to get a cash-out refinance at the highest LTV possible because she wanted to travel or do something else fun.
I have been working with reverse mortgages for 14 years, and I totally agree with your frustration with your client’s daughter, and her greediness. Many of my clients are brought to my office by their children who have done the primary investigation of reverse mortgages. They have advised their parents that the reverse mortgage is a very useful “tool” to help both parties out. It will definitely help the senior stay in their home, more comfortably and it will help the children financially as well because they will not have to aid their parents.
I too had a daughter who at the time of application talked her mother out of doing the reverse mortgage simply because she was counting on the value of the home to get her (the daughter) out of personal financial difficulty. The mother really wanted the reverse mortgage but let the daughter badger her out of it.
My feeling about this horrible treatment of a parent in front of a stranger (me) is that eventually “What goes around comes around”. Unfortunately, not fast enough to help the mother.
Sometimes, as I speak with these homeowners I get the sense that they count on me to help them more than their children. I have heard quite often that “Oh, my son is just too busy to do this that or the other thing. When they need any help at all they call me instead of their family and it can be as simple as where do I find a carpenter, or electrician or health care worker.
I do not know how long you have worked with reverse mortgages but your experiences will run from horrible to rewarding in helping these people stay in their homes, and you will receive flower bulbs and cookies etc. from the lonliest ones. I had a gentleman who had absolutely no family left and he would come to my office once a week with a coffee cake and we would sit down and have coffee and cake together. He did this for 6 months after we closed his loan.
Best of luck in your endeavors. Just remember you are helping many people live more comfortably.
Arleen