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May 10, 2019 by |

California and San Francisco Financial Elder Abuse Attorney: The Dangers in Reverse Mortgages


The Pitfalls of Reverse Mortgages

Problems for Surviving Spouses

“Reverse mortgages are just a terrible idea for seniors, unless they have no other options.” That’s what our own Ingrid M. Evans recently told a reporter for covering a story of a 79-year-old widow who may lose her home to a reverse mortgage lender.[1]  Some years ago, she and her husband took out a reverse mortgage on their home of nearly 30 years.  During the approval process, the couple agreed to remove the wife’s name from the deed because the lender told them that was the only way for the loan to be approved.  The widow was assured her name could go back on the deed if her husband died first, so the couple understood the wife could remain in the house if the husband died first. After the husband died, however, the reverse mortgage lender foreclosed on the home because the deed was never changed to add the wife back on. 

This is just one of the things that can go terribly wrong with reverse mortgages. Whatever happens down the road with these reverse mortgages, upfront costs can run as high as $15,000 to $20,000 on a $200,000 home. These high origination costs can be financially disastrous, especially for those who don’t plan to stay in their homes long or want to borrow only a small amount.  Other serious downsides include accumulating interest, increased ongoing costs of maintaining your home, and the need to move for medical or other reasons. Our lawyers understand the problems with reverse mortgages and may be able to help you if you or a loved one has lost money on a reverse mortgage transaction here in California.  Call us today at (415)441-8669. 

What to Watch For

Federal and State laws have some protections against abuse in these transactions. There are mandatory counseling rules, cooling off period minimums, and cost disclosure requirements.  If mortgage brokers and lenders do not follow the rules, you may have grounds for rescinding the mortgage and seeking damages.  The California Insurance Code also expressly prohibits the cross-selling of annuities with reverse mortgages.  You cannot be forced – or enticed – to use the proceeds of your reverse mortgage to purchase an annuity.  If you are considering a reverse mortgage, seek out the advice of a professional with nothing to gain from the transaction.  These are dangerous and expensive products and you need to learn all about them before you move forward in considering one.  Don’t trust the lender to give you the facts and do not allow the lender to attempt to “tie in” other products to your loan.  Remember that at death the lender will take the mortgaged property unless your heirs are able to pay off the indebtedness completely.

Contact Us

If you or a loved one has lost money on a reverse mortgage or been the victim of financial elder abuse or fraud in a reverse mortgage transaction in San Francisco or elsewhere in California, contact Ingrid M. Evans and the other Evans Law Firm elder abuse attorneys at (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement.  We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

[1] Ingrid and Evans Law Firm, Inc. were not involved in the case but the reporter covering the story reached out to Ingrid as a lawyer who focuses on financial elder abuse for her take on reverse mortgages.  You can read the whole story and Ingrid’s comments here:

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