Reverse mortgages

These financial vehicles known as "reverse mortgages" began as a way for seniors to stay in their homes on a limited income.  The idea is that after your mortgage is paid off all your income is in your home and you can't touch it for daily living expenses.  You are "house poor".  So the mortgage is "reverse" and you get paid for the equity in your home.  The catch is, the bank takes first what you borrowed when you sell, die or otherwise leave your homed

Over the years there have been criticisms of reverse mortgages because of high fees and, then even worse, what does a senior do when the reverse mortgage money runs out and they can't keep up the property, etc.  Well, the bank can, and does, foreclose.

As is the case with many other decisions....financial and otherwise, the devil is in the details.

In the years before the Great Recession, my mother, in the early stages of dementia, was living in the only home she had ever known - the home she and my father built the year before they were married.  The home wasn't meant as an investment but it turned out to be exactly that 60 years later.

Mom wanted to stay in her own home and not go to a "facility".  She had limited savings and a small pension plus social security. She needed help.  She was climbing up stairs to her bedroom.  Once she fell going down.  She avoided injury by going "bump, bump, bump", on her buttocks.  She explained this to our daughter who visited and noticed painful bruises all over her back to her knees.

We slowly hired "helpers" for Mom, older Irish women who were probably in the country illegally.  We had several of them, part of an Irish-American, Catholic cohort who lived not far from us.  Mom was comfortable with them since she was third generation Irish-American and loved "the Irish".

Then the small amount of Mom's savings ran out.  Reverse mortgages were becoming increasingly common and home prices were going up.  We took out a reverse mortgage for Mom's care, then again as the value of her home went up.  Then again a third and final time.  Then we had to sell Mom's home and move her into an apartment.  This was February 2007.  One sister suggested we try to sell Mom's home  privately since homes were selling so fast.  Then it happened before we barely blinked an eye. The housing recession happened first. There were some lookers but no buyers. Real estate wasn't selling.  We gave the listing to a realtor.  After several price reductions, Mom's home was sold in October 2007 .  We took the cash and used it to fund Mom in an apartment.  When Mom was 95 her money ran out. We applied for NY state Medicaid which was approved but we had to take minimum wage NY state approved care givers.  No more lovely Irish women.  One of the new care givers dropped Mom in the shower.  Mom broke her leg and, amazingly, recovered, using a walker but still mobil.  Mom died at age 97 with my sister by her side.  She felt safe and secure with my sister holding her hand.