Six months: that's the amount of time the bank told us we had to sort out Dad's repayment of his reverse mortgage loan. Six months is what we were given to grieve, then come to terms with all the financial aspects left in limbo with his death. There are four siblings, multiple grand kids, and two households full of memories to sort out. Apparently, we should speed up the grieving process unless we want to lose our childhood home to the repayment of the reverse mortgage agreement. The farm house upstate has been in the family for generations, our summer escape from the concrete existence of the city. The city home (apartment) is (or rather was) rent controlled and apparently a hot commodity, if one were to actually have time to listen to the variety of inquiries from the circling real estate vultures. We don't care, we want to grieve. We want to take our time combing through the photo albums, the boxes of our childhood toys, the memories. Two homes full of stuff and six months to sort out life after death.
Why did Dad hold onto a home he could no longer afford? It would have been so easy to stay in the city; you wouldn't believe the cost of his rent-controlled apartment, less than what a singular grandkid spends on Starbucks in a month! He had great neighbors, great homecare visits, and a plethora of accessible senior services. Living upstate became more difficult as he aged-limited medical facilities, difficult transportation, and his social life revolved around the pulsating vibrancy of the city. He was a New Yorker, a city guy to the core. When he was younger, when we all were younger, it was cleansing to escape the city for the summers. We were all out of school (Dad was a teacher) and the upstate farm house was a glimpse into a different dimension. One without public transit, museums, or takeout options from the far corners of the culinary world. We had a garden, swam in the pond, stayed out as dusk fell to watch the deer, and camped in the backyard gazing at the night sky. We fiddled in the barn with the antique cars and ran wild and barefoot through the acres and acres that surrounded the home. Soon the end of summer would sneak back upon us and we would be ready to return to our friends, the hustle and bustle of the city, and the school year. We traded the roaming wildlife of upstate for trips to the zoo, star gazing for trips to the planetarium. We fell into our city routines-grabbing a slice after school and coming in when the street lights came on. As I grew older I discovered I was in fact, not a city mouse, but a country mouse. I cherished the upstate trips and when it came time to go to college I chose a SUNY as close as possible to the farmhouse. As Dad aged he chose the city over the country. My siblings fell in between, into the suburbs.
Somewhere along the way Dad fell into financial hardship and nobody had a clue. Birthday presents never faltered and Christmas gifts never waned. The man that had taught his children how to save for a rainy day, how to balance a check book, and how to pay for things in full instead of accruing interest had taken out a reverse mortgage to pay for his expenses. He had taught his grandchildren how to withdraw money from a teller, because using an ATM was advertising to get mugged. He told the grandkids that if it was worth withdrawing cash for something, it was worth the extra time and contemplation in a person-to-person transaction. Unbeknownst to us, this same man was now strapped for money and he relied on the very institutions he warned us away from. Interest and borrowing were the 8th and 9th deadly sins when we were growing up. We were taught fiscal responsibility from earning our allowance, to getting our first jobs, to paying for college. So what parallel universe were we in when we were contacted by the lawyer and then the bank about the reverse mortgage? Surely there was a mistake-not our Dad, who was a model of fiduciary perfection. How could he possibly succumb to those midday commercials falling in between "Matlock" and "Murder She Wrote"? There was no mortgage to pay as the house had been owned for generations, no significant monthly bills thanks to the rent-controlled apartment, no excessive medical costs thanks to lucky genetics and a great retirement medical plan, and no lavish purchases other than birthday gifts for the grandkids.
I could emote ad nauseum the many ways in which our family unit broke down for him to reach the point of relying on a bank instead of his kids. I could lambaste the lending institutions for predatory influence of our most vulnerable populations and endlessly fulminate against the breakdown of the fabric of society where elders are even confronted with financial hardship. I could wax philosophical about the family unit and its decline in our industrialized society, with the wolves of capitalism clawing at the doors. Undoubtedly these are all great topics to be examined by scholars, pundits, and policy makers. It would take a lifetime and more to properly examine all the facets of this complex issue. My family, however, has just six months to make right what has gone awry so we can keep our family home in the family and off the auction block.
1. There are options for financial assistance aside from a loan! Without knowing for certain the details surrounding Dad's need for additional cash and a reverse mortgage we wish he would have taken advantage of financial perks available for his age and income. His county offers a lower property tax rate for both his income and age. He could have received assistance paying his utility bills and even offset his cost for groceries. There are relief programs available from local municipalities, state and federal programs, and non-profit groups.
Start your search for financial assistance.
2. There are options for loans. Without knowing how in-depth Dad explored his options, yet having done some cursory investigation of our own, we can attest that he got a bad deal. His fees are exorbitant and his interest rate considerably higher than most. There are options for different types of loans and options for lenders. Not all are created equal.
Start your search for loan information.
3. There are different types of reverse mortgage loans. As mentioned above Dad got a bum deal; his fees are exorbitant and his interest rate high. There are different types of reverse mortgage loans and we wonder if he was properly informed on the different options available to him. Perhaps if he had negotiated a better reverse mortgage agreement I wouldn't even be writing this article.
Contact an approved counselor to discuss different available options.
4. Financial predators are lurking: beware! Luckily Dad wasn't swindled. Yes, he got a bad deal but not the worst deal and luckily he wasn't a victim of a scam. Many seniors are not so lucky. Financial hardships, lack of communication and comprehension, and an absence of an advocate can lead to a heartbreaking disaster.
Tips on how to spot a scam
Helping to protect senior investors
5. Reverse mortgages are a viable option for many but are not a panacea for all financial woes. As mentioned above there are several types of reverse mortgage options available. Reverse mortgages have been around for almost 30 years and have helped many fulfill their wishes of aging in their own home while having money to pay their bills. Reverse mortgages are more regulated now than in the past, although there will always be financial predators looking for an advantageous entry to defraud unsuspecting parties. Informed, carefully researched decisions may support the option of a reverse mortgage for your elderly loved one. Communication and advocacy are key.
Great information about the business of reverse mortgages.
6. My childhood country home means a great deal to me. I would be heavyhearted not to be able to make new memories at the farmhouse with my spouse and child. If given the option, we would move to the country home immediately and call it home permanently. While the upstate farmhouse house holds great value to me intrinsically, it has become a bone of contention for the family financially as we help settle Dad's estate. Perhaps better communication would have given both Dad and I better opportunity to help each other. I wish we would have been more in tuned to the financial concerns that older adults have so we could have broached a conversation on the topic.
Older adult financial concerns
Tips on how to communicate with aging parents