Who can explain to my stubborn, closed minded and untrusting Mother what her reverse mortgage really means?
Dad and Mom got it 10+ years ago. Definitely a good thing for them - they had no savings, no IRA and Dad’s earning capacity was as a high school dropout. Mom never worked outside the home. Over a year ago, I wanted to do some planning ahead and understand her RM / finances. That was the beginning of it all - she’s NOT INTERESTED in sharing anything with me (even though I’m all she has and her POA/AD). “I don’t have to worry about it because I’m going to get everything” she says. There is NOTHING she has that I want, so she just blows me off.
Fast forward to November 2019 when Mom had an ER visit, diagnosed with mild neurocognitive decline, told not to drive till state eval/test. During her stay, she was given the hospital’s Financial Assistance paperwork. Mom poo-pooed the paperwork saying she’ll just pay the hospital when she got the invoice. Told her that hospital give HER the paperwork because she has a need for assistance, given her ER visit, testing, etc. Told her I’d help fill it out. Yessed me in the hospital, but she hasn’t provided enough info (and WON’T, she says). Because, wait for it . . . , she says she has access to a good chunk of money through her reverse mortgage. Yes, she does, but that’s the reason hospital gave her Financial Assistance paperwork — she doesn’t have savings, IRA, pension, etc. Then tells me “That’s the most stupidest thing I’ve heard!” Bottom line is she doesn’t understand a reverse mortgage - she has always said she still owns the house.
She doesn’t believe anything I say, hasn’t talked to me in 2+ weeks because I have her car keys, so any trust and relationship we’ve had in the past is down the toilet.
Thinking I should contact the RM company? I was able to get that info as she has papers lying all over her table and couch. ER doc asked me to enter her home, with Mom’s approval, and bring back the bottles of her meds and saw RM paperwork. Hoping they would be able to send her a letter explaining that she does NOT own her home.
Maybe I can ask the lawyer she trusts who drew up her POA/AD to look over the RM company paperwork and then explain it in simple terms that she does NOT own her home.
TY for suggestions/help!
8 Answers
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Generally they will advance up to 55% of the value of the home at the time the mortgage is taken out. Those funds are put into an annuity with is paid out monthly for a period of time. In the mean time the mortgage is compounding interest .
If the house was worth $200,000 then the RM company would allow up to $110,000. This would be put into an anunity and pay out monthly, say for 20 years.
In the mean time the loan is compounding interest at a rate far higher than mortgage rates. So if it was a 7% interest rate, on $110,000 the current balance would be around $215,000 outstanding. Now the house may have appreciated in value if it is in one of the expensive cities, but it may have stagnated or lost value depending on the location.
Now as for your Mom not listening to you, we are the children and what do we know :P Your Mom rather believe Jerry Orbach, Robert Wagner and "the Fonz", actors who did those commercials years ago.
It would be a good idea for you as POA to contact the RM company, find out how much is owing on it, the interest rate, get some idea of whether the loan amount is getting close to the full value of the house, and what will happen if the loan amount gets there. It would be good to get a copy of the RM, but make sure that you understand it if it’s complicated. Then you should be able to explain to your mother in terms of $$$, and stop her from assuming that she has a bottomless amount of money and doesn’t need to minimise her expenses.
Please note that your mother was almost certainly told that she still owned the house, you have actually got it wrong, and that is why she won’t believe you. However reverse mortgages can be a trap, not all people understand the risks, and not everyone gets a full explanation.
Yep, she’s DEFINITELY not listening to me at all, since taking her car keys away November. She was mad as hell, called me and husband names and threatened to call police because keys were to HER car. I said there would be no way i would do that, since her discharge from hospital included scripts for driving eval/test. She shut down and hasn’t spoken to me since the 6th. I was away, my husband got shingles, so I called her to see if she remembered if I had chicken pox (as an only child with mom who didn’t drive, I wasn’t exposed to much, I thought). When Mom called back (because I always have to leave a voice message about WHAT I want), she said I did not have them. Asked where I was and told her home. She said ‘it’s always something’ about my husband then proceeded to tell me she had to get off the phone to go blow her nose! How’s that for asking how your only kid, her husband, grandkids and Our time away together was!
She’s just so distanced herself in the past year. BUT now it’s because she knows she shouldn’t be driving AND SHE IS! Her neighbor texted me while we were away, asking if I had given the keys back (which I had not). So Mom’s driving . . . I’m assuming she paid $$$ for a new key fob from her ‘friends’ at the dealership where she made her purchase the year after dad died. (Unfortunately, the psychiatrist, neurologist or the attending physicians did not put through their mandated reporting to the state to stop her from driving.). So i did (while I was on vacation).
Mom ABSOLUTELY believes anyone else but me (especially TV people!).
Thanks for listening to my rant!!!!!!!!!!!!!
In the past year, she’s pretty much gone no contact with me. Since her ER visit in November, she was told by attending neurologist to partner up with me because she’s lucky to have someone looking out for her. Of course mom agreed, until I took her car keys (see my rant below).
She doesn’t want my opinion and CERTAINLY does not want to talk to me about ‘her business’, even though she’s got a diagnosis . . .