John and Sue's Story

“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.

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  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.