|Pat & Dick Hickerson
|This story is about my parents, Patricia and Richard Hickerson who were
sold a reverse mortgage they didn't need, while dad was in the last month
of his life with terminal cancer on narcotic pain medication, Mom had
Alzheimer's Disease was unable to complete a sentence. It’s a tragic
story of deceit, fraud and purposefully targeting vulnerable seniors to
deprive them of their property, retirement, dignity and quality of life.
Mom and Dad were good, caring, and trusting people who worked all their
lives to provide for each other and their family. They lived in a modest
home they took pride in for 25 years. Mom and Dad volunteered together
delivering “Meals on Wheels” and Mom volunteered for the city and thrift
shop. They enjoyed giving back to the community where they lived.
MOM AND DAD'S HEALTH
In April of 2002 Mom was diagnosed with Alzheimer’s disease and could
no longer balance a checkbook or manage the family finances as she had
all her married life. By 2003 mom was unable make change for a twenty
dollar bill. She required assistance in basic activities of daily living.
Dad had suffered from 9 major illnesses for more than 10 years, including
heart disease, lung disease, and diabetes. By 2004 he had metastatic
cancer in his head and advanced liver cancer. The day before my Mom
and Dad signed the reverse mortgage contract Dad was in the hospital
under a general anesthesia for a liver biopsy. He learned that day he was
terminal with days to live.
In January 2005 Dad applied for long term care insurance for Mom and
himself. They were denied coverage because of their medical history and
the fact that Mom would need long term care for Alzheimer's disease.
REVERSE MORTGAGE TIMELINE:
In 2004 Dad noticed the TV ads featuring (actors) James Garner and
Robert Wagner talking about the benefits of Reverse Mortgages. Dad
responded to a mailer wanting to know what a reverse mortgage was.
Les Barnhart, a reverse mortgage salesperson came to my parents home
in March 2005 with 2 months of reverse mortgage sales experience. He
had 10 years long term care insurance sales expertise and was still selling
it when he met with my parents. He would have known from his LTC
insurance and "Certified Senior Advisor" expertise mom and dad lacked
the capacity to enter into a reverse mortgage. Not one of the promised
benefits in Barnhart's flip chart presentation applied to my parent's
circumstances or financial situation. At the end of the presentation, he
presented a company generated loan application, good faith estimate,
disclosures, loan comparison sheet, and amortization schedule based on
property value guesstimated by my dad to be $650,000.
Mom and Dad had HUD counseling over the phone without any verification
of who they were talking to, what they understood or if they had any
capacity to comprehend what was being said. In 2005 the only purpose of
counseling was to inform the borrower of the process of getting a reverse
mortgage. Most borrowers believe they are being given the financial and
legal advice by the "counselor" they need to determine if a reverse
mortgage is suitable for their particular situation. They are not..
There is no counseling on the things that should matter - what the financial
situation, health, long term need, legal and tax consequences specific to
each borrower on these critical end of life issues?
A formal property appraisal was done after the counseling and came in at
$530,000 - 20% less than Dad's estimate. The salesman's only disclosure
was the appraisal came in lower but Dad would get about the same
amount of money.
In May 2005 a couple of hundred pages of the reverse mortgage contract
were presented to my parent's for signature. This was the first and only
time my parents would see the contract with the correct figures based on
the formal appraisal. ONLY 12 pages of the contract were left with my
parents, none of which contained any of the critical terms such as the lien
amount, right of rescission, HUD closing statement, deed of trust, closing
costs, and an amendment to my parents trust (created by a clerk of the
lender). My parents were never told to speak with their financial advisor or
attorney about the consequences of a reverse mortgage to their
retirement, or if it would meet my dad's goal to provide long term care
outside the home for Mom.
My parents did not need a reverse mortgage: They had a $200,000
investment portfolio, $60,000 in the bank, $3,000/mo income and approx.
$1,500 expenses. They had a 30 year fixed mortgage paid at $650.00 by
their investment interest. Being sold a reverse mortgage under these
circumstances has been financially devastating for my parents, their
estate, and our entire family.
The Reverse Mortgage my parents received was:
One time lump sum payment $ 81,000
For this the lenders:
Paid off existing mortgage $121,000
Charged Fees and costs* $ 25,000
Property LIEN $470,000
HOW THE REVERSE MORTGAGE AFFECTED OUR FAMILY
One month after signing the reverse mortgage contract Dad passed away.
It breaks my heart that Dad's dying wish to provide mom the needed care
outside the home for the rest of her life, was stolen from him. If the terms
were explained simply and honestly that for a one time payment of $81,000
(15% *of their property value) they would pay $24,000* in fees and costs in
exchange for their home with $400,000 equity, dad would never have
agreed. Let's be real - who in their right mind would agree to these
Financial Freedom, the Servicer filed a wrongful foreclosure claiming my
mom didn't live in the house - ignoring the occupancy certificates sent in,
the representative they sent to our door who verified she lived there, our
letters and those of our attorney stating she occupied the property as her
primary residence at all times. HUD forced a rescission in 2011. Financial
Freedom filed a second defective Notice of Default in 2012 and then
rescinded it voluntarily so we could not get an injunction to stop their
foreclosure. Concurrently with the 2nd rescission they recorded a 3rd
defective Notice of Default, cut off all communication with us, and sold our
property illegally at auction, ignoring our right and request to payoff the loan
to get rid of them.
This didn't just happen to my parents. There are thousands of other
families with similar devastating reverse mortgage stories. It is happening
everyday to someone's parents, relatives or friends.
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