Friday, July 27, 2012

Las Vegas Homeowner Dies Before 'Under-Aged' Wife Turns 62; Now Wells Fargo Moves To Boot Widow By Foreclosing On Deceased Hubby's Reverse Mortgage

In Las Vegas, Nevada, KTNV-TV Channel 13 reports:

  • [I]n 2006, Linda and Tom [Brumfield] got a reverse mortgage from Wells Fargo. In a regular mortgage, you make monthly payments to the lender. But in a "reverse" mortgage, you get money from the lender and generally don't have to pay it back for as long as you live in your home.

    It's a way for people 62 and older to convert home equity into cash for things like medical bills, which is what Linda and Tom needed it for. "Wells Fargo gave us $80,000 for the house and they said we could both live here until we died, which I believed."

    But she says Wells Fargo didn't keep their word. [...] Tom -- a World War II veteran -- was 62 long before Linda, so only he could qualify for the reverse mortgage loan at the time. But Linda says the bank made them a promise.

    "They said that if we put the house in his name, then as soon as I turned 62 they'd just include my name on it for a service fee." But Tom passed away suddenly in 2008, shortly before Linda turned 62.

    "And when my husband died, everything changed. They wouldn't call me or anything, didn't get any response." What she did get were foreclosure notices posted on her door even though they sent her a letter in 2009 saying she was eligible for the reverse mortgage.
  • "It's a real, real tragedy," says Attorney Matthew Callister, who's filed multiple lawsuits over reverse mortgage loans like Linda's. "Typically, and from what I've seen here, the cost of that loan is horrific. There's not just lots and lots of hidden fees and costs built into the loan..." There's also lots he says banks don't tell borrowers.

    "Invariably it's fraud in the inducement, fraud in the making of the loan," Callister says. Linda's name isn't on the reverse mortgage loan, but Wells Fargo wants her to pay it off. And even though her name is on the title of the house in a living trust, they won't put it on the mortgage. "Not unless I pay $330,000, whereas a stranger off the street could come and buy it at the auction for $90,000."

    And don't think she hasn't considered being that stranger. But she says Wells Fargo warned her neither she nor any of her family members could buy the home at auction. "I think they were very deceitful and they tricked us into this reverse mortgage. I do believe that."
  • Callister will be working to help Linda fight to keep her home, "Because we recognize that this is a potentially predatory lending situation that's going on involving a senior citizen, that can very well constitute elder abuse."

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