“We’d worked all our lives to buy a home and realized that it could just be taken from us.”
John and Sue spent their lives working hard to build a thriving business in Ohio. When it came time to retire, the snowbirds invested in a modest home in a gated golf community in Venice, Florida. John joined the homeowners’ board; Sue became active in their new church.
A Pair of Unexpected Setbacks
Soon after, John became very ill, requiring multiple surgeries. Medical costs, including pricy in-home care, drained the couple’s savings. Between mounting bills and insurance premiums, they struggled to pay the bills. “We hadn’t had money problems like that since we were a young couple,” Sue recalls.
The couple contacted their mortgage company to ask about reverse mortgages, a mortgage product for homeowners 62 and older that taps into home equity to provide income. Their mortgage company explained that reverse mortgages have certain requirements, including that they would need to stay current with “property expenses”, which includes property taxes, homeowners insurance, and homeowner/condo association fees.
John and Sue thought having a reverse mortgage would ease their financial strain, and for a while it did. But in 2014 Sue took a fall and was hospitalized for a few weeks. In her absence, bills went unpaid, including their homeowners insurance, which had risen from $160 a month when they’d bought the house to more than $300 a month.
Nearly Losing It All
Their policy was cancelled for non-payment, putting their reverse mortgage loan into default, and their mortgage company wanted reimbursement for over $16,000 it had paid for their taxes. “The situation really scared us,” Sue says. “We’d worked all our lives to buy a home and realized that now it could just be taken from us.”
Fortunately, their mortgage company referred them to an innovative program in Florida that uses the state’s Hardest Hit funds to help seniors with reverse mortgages avoid foreclosure. The program provides qualified homeowners with funds to help pay past-due property taxes, insurance, association dues, and upcoming property-related expenses.
Finding a Way Out
As part of the application process, Sue worked with a HUD-certified counselor from Clearpoint, a division of Money Management International (MMI). The counselor referred them to state and local aid programs to help offset what they were spending for food and medicine. He also set up a monthly budget to cover paying bills and putting money aside for upcoming property expenses. With his help, the couple was able to achieve a $137 “surplus” in their budget each month.
With their new budget, the counselor felt John and Sue may qualify for the assistance program. He worked with Sue to prepare the documents needed to complete the application, so that income and expenses could be verified. According to counselors at MMI, many seniors who could be helped by such programs don’t qualify simply because they don’t send in the proper documentation.
“You don’t want to forfeit an option by failing to follow the program requirements,” says Cara Pierce, Certified Housing Counselor at MMI. “Hardest Hit programs are a great way for homeowners who have suffered an unforeseen hardship to get back on track and remain in their homes.”
John and Sue turned in all of their paperwork and were approved for $18,600 in assistance. The money was used to reimburse their mortgage company, and they are confident that if they keep to their new budget they can afford future property expense payments.
With their finances back under control, John and Sue can turn their attention to what’s important --- getting John healthy. “Foreclosure is a stigma that’s hard to live and deal with… we are so grateful for the assistance we received,” says Sue.
John and Sue are real clients. Their success is a result of their hard work and program availability at the time of their hardship. Similar success is not guaranteed.