Champion Mortgage and Bank
of America Foreclose on Reverse Mortgage
We are not seeking charity, we are seeking
justice - either from Congress or judicial action. Many seniors with reverse
mortgages need help to keep from being thrown into poverty because of the
banking crisis. Here is my own predicament which explains the
Our HECM Reverse mortgages was made under
the following conditions: 1.) that the homeowner will live in the home as a
residence; 2.) the homeowner pays home owner insurance and property taxes on
time; 3.) homeowner maintains home in good conditions 4.) bank lends only a
portion of the equity based on the initial appraisal of the home, so, in effect,
homeowner is retaining the difference between that amount and the appraised
We took out a reverse mortgage with Bank of
America in August 2007 on basis that our home appraisal was $275K, our loan
would be $148K, leaving us with an equity of $127K. In making the decision on
whether to take out the reverse mortgage, we gave heavy weight to
amortization schedule given to us by the company who initiated the mortgage,
(Access Mortgage), as well as those given to us by counsellors and Bank of
America. All predicted that, after making the loan, we would still retain at
least $100K of equity for fifteen years. . The schedules were predicated on
increased property value of 4% minus outstanding balances, which assumed an even
greater interest rate than we actually had.
Based on these predictions, we planned to sell
the property within a year or so, take our equity out and move from Florida to
Arizona. To further insure we would still have good equity and comply with good
maintenance terms, we immediately used the money
we borrowed to completely update our home with new flooring, tile, outdoor
vinyl siding, new lighting, new central heat/air, new Renai gas heater and many
other small renovations. We assumed that would increase the value even more. At
the very least it should have maintained the home value for at least another 10
years. Keep in mind that the appraisal was made before we made these
By 2008, one year later, the true total value
of our home based on comparables in the neighborhod was down to about $159K due
to the banking crisis and unemployment in a devastated economy. Our equity was
zero. Over the next five years we made many attempts to sell this home for at
least $10K over our HECM debt, but to no avail. It began to dawn on us that 1.)
The banks knew or should have known that there was a banking crisis just months
ahead of our loan, and that our equity would be zero within a year and/or 2.)
We had a bad appraisal to begin with, as well as bad counselling.
People with reverse mortgages are required to
live in their homes, so if the economy is bad in the area, they cannot move to
another area to find employment. My partner and I lost our business as a result
of economic crash, and could only find employment of some kind by leaving the
area. We took last of our savings and moved to Arizona, keeping in mind we would
return end of each year and retain our residency requirements, which we did for
the next three years.
Moreover, the insurance companies in the area
increased their Home Owner Insurance rates by as much as 38%. People with
reverse mortgages are required to pay HO Insurance and property taxes.
Infuriated with State Farm from whom I had HO insurance for close to 30 years. I
cancelled my HO policy immediately. Bank of America bought a new one and tried
to overcharge us on it until I forced them to correct it.
Being on Social Security, both of us had
limited income and for several years got no cost of living increases. (We are
in our mid-70s.) By 2010 we had lost everything we owned. Our equity was gone.
Our business was gone. Our expenses were up. In short, the banks, in our
opinion, had robbed us of everything! Then I came down with cancer of the
throat, and, later, cancer of the lungs. We spent more savings running around
the country looking for cures. Once my own medical problems began to resolve
themselves, my partner had to have knee replacement. We had this done in
Arizona, where he had found a new job as a caregiver at $10 an hour. This after
having been in the tile business for 35 years. Everything that could go wrong,
went wrong for us. We had had to borrow money for our expenses, and the unpaid
"banking" creditors were harrassing us unmercifully.
In attempting to save our home in Florida by
keeping it as a principal residence, we were required to travel there from
Arizona and stay there are least two months at the end of each year. Finally,
now, we have gone there for the last time in December 2012 and came back in
February 2013. We have informed Champion Mortgage company, (who recently
purchased our loan from Bank of America), that we have moved permanently to
Arizona and will not return except perhaps to move the rest of our possessions.
There is no equity there, so we are faced with foreclosure.
We attempted to negotiate with Champion
Mortgage on a deed-in-lieu deal, but no luck. The response of Champion Mortgage
is that we should get counselling and bring with us all sorts of evidence of our
income, assets, etc. However, we will not do that because we are not seeking
chairty, we are seeking justice. We know we have been cheated out of our life's
savings, and we are hoping to be compensated. We would like help from any
attorneys who are litigating on behalf of elderly reverse mortgage holders. We
are also hoping Congress will pass legislation that changes some of the rules on
behalf of elderly homeowners who are faced with foreclosure because of the
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