HOUSTON – If Celia Elmira “Patricia” Scott signed her reverse mortgage after 2014, she might still be in her home today. Instead, she has been forced to pack up and leave.
Scott and her husband William signed an agreement for a reverse mortgage in 2007. The couple believed the deal would allow them to live in the place they bought in 1972 until they passed away.
Her husband was 62 and Scott was 58 when they applied for the mortgage.
But when her husband passed away at age 66, the lender wanted Patricia out, arguing her husband was the "sole borrower under the note and mortgage."
"I guess it didn’t count anymore,” Scott said.
Veteran attorney Kelly Bosecker filed appeals on Scott's behalf but was unable to convince the courts to allow her to keep her home.
"I disagree (with the decision)," Bosecker said. "I mean, I think it was clear in the paper work that Ms. Scott was a borrower, but the court ultimately determined she wasn’t."
Scott was scheduled to move out this week and is frustrated by the hard-line stand the lender is taking.
"I can’t even stay here with a house payment," she said. "They won’t even let me pay a mortgage payment to stay here. They want all or nothing."
According to Bosecker, "all" is $100,000, an amount her client doesn’t have. In fact, Bosecker has been handling the case pro bono.
The Federal Housing Authority changed the reverse mortgage rules in 2014 to include protection for the surviving spouse in a reverse mortgage agreement.
Nancy Hecht, a certified financial planner, said you have to make sure that the spouse is listed properly.
Hecht said several of her clients have used a reverse mortgage successfully, but she stresses there are fees to pay and the property taxes are still your responsibility.
Hecht said of all the new changes in reverse mortgage protocol, the most important is what the surviving spouse must do to maintain the rights to the property.
"The surviving spouse has 90 days to change the title of that house," Hecht said. "If they don’t, then it becomes void and the whole reverse mortgage becomes due."
For more information on reverse mortgage rules, click here.