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Reverse-mortgage nightmare can start after borrower dies

Good blog post on the foreclosure nightmare that many surviving spouses face when their deceased spouse had taken out a reverse mortgage.

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Financial decisions can have consequences that outlive the people who make them.

In the case of three women, two in South Philadelphia and one in Delaware County, the decision to take out a reverse mortgage – a special kind of loan that allows borrowers 62 and older to convert a portion of their home’s equity into cash – has made their lives a nightmare.

All three were younger than their spouses and not yet 62, which meant they did not qualify for these mortgages and could not be co-borrowers. Their names were removed from the deeds so their husbands could qualify.

Once their husbands died, and, in some cases, even with their names back on the deeds, they faced foreclosure because the law allowed lenders that option.

Ruth Guerriero of South Philadelphia remembers the day she got the letter that “scared me to death” – the one threatening to foreclose…

View original post 197 more words

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