The Grief Continues For Surviving Widows Being Refused Loan Help & Forced Into Foreclosure Shortly After Hubby's Death
In Tampa, Florida, the Tampa Bay Times reports:
- Lawyers and legal-aid counselors call it a sad reality of the housing crisis: Widows refused loan help and forced into foreclosure in the years after their spouses' death.
For distressed homeowners, the bureaucratic obstacle course of refinancing in an age of tight credit is hard enough to navigate on its own. But for grieving widows with finances already in disarray, the loan maze and its accompanying fears of losing a family home have proven a demoralizing shock.
"It's a clash of circumstances that couldn't be any more devastating," said Kathleen Mullin, the executive director of St. Petersburg-based Gulfcoast Legal Services.
"This problem and the web of paperwork causes so much stress that it can impact (widows') health, impact their well-being, to the point where they don't even know what to do. They're just frozen."
Widows caught in this runaround, counselors said, never realized the damage it could cause if only their husband signed the mortgage note. They did not expect it would prevent them from a loan modification that could allow them to keep paying and stay in their homes.
There's no public data on how many widows have faced this frustration. But attorneys and counselors say it is a growing problem for surviving spouses – predominately women – barely seen before the foreclosure crisis began.
Billy Howard, the Morgan & Morgan attorney representing Jackson in a harassment lawsuit against Wells Fargo, said his firm has more than 25 widows with similar problems, up from only a few cases in recent years.
"You've got people who want to be able to pay and think they could afford to stay," said foreclosure defense attorney Mark Stopa, whose firm has about 10 similar cases, up from none a few years back, "and the bank tells them it is simply not possible."
The trap has proven particularly troublesome in Florida, with high rates of home distress and more than 1 million widows and widowers, according to the U.S. Census Bureau's 2010 American Community Survey.
- Karine Gialella, a Gulfcoast Legal Services attorney, said she worked with a St. Petersburg widow in her 80s who found the only way to avoid foreclosure was to file for bankruptcy.
- Though due-on-sale clauses allow lenders to demand full payment when a loan changes hands, federal law prohibits calling in a loan just because a widow took it over.(1) But banks have argued in court that they're demanding payment because of the default, not the death, said Matt Bayard, a staff attorney with Legal Services of Greater Miami. Some judges have agreed.