Fighting to prove reverse mortgage was obtained fraudulently. Any advice?

How did this story end or how is it still going. We have a sibling who did a RM on our only living parent. Took all the money and left him to rot and it is a complete mess. Any information would be greatly appreciated.

Good for you Washington! Sic Semper Tyrannis! Judges have Grandmothers too. :-)

I have submitted my report to the AG office. Met with a special agent, and provided him with my evidence. The Bureau of Special Investigations has started their investigation. I will post the outcome.

But she DID work: " She doesn't work and has lived off my grandmother for years." Just by living there, I'm assuming she did most of the caretaking since she is POA. Anyone thinking that taking care of anyone who is elderly is not a full time job is so so wrong. And if she did take care of them she is the next "rightful" heir. I guess we may not be getting most of the needed info……..

Q- you said that grannie had been diagnosed w/dementia in 2007 (7 years) and that, quote: "my aunt was the main person taking my grandmother to doctor visits, does that mean she should be compensated financially? I don't believe so! especially since she's had free room and board for many years....that's the least you can do for your mother!"

Q, if you really feel that the women-folk should just work for free as a caregiver & should be just grateful to get free room & board you probably are not going to get much empathy in this. Ditto for your being upset that they left the house that you are supposed to inherit dirty.

I wouldn't be surprised if that old secret will done in 1993 was replaced by another with your aunt & uncle (the caregivers) as the heirs. 20 years is a long, long time and who grannie favored back then could have changed over time. Aunt was named POA after all. There is going to be a good deal of money you will have to pay for discovery on all this. Pam is right, you will need hard evidence and doing discovery is going to have a pretty good paralegal costs alone.

Was grannie on Medicaid or on any community based state subsidized program? If so, the states MERP program will have a claim or lien on the property ahead of you. Emotions aside, it may not be worth spending time & $$ on all this if that is the case.

The only resolution is to have the aunt & uncle arrested for fraud. What you think might have happened is not enough evidence. Present hard evidence to the district attorney.

QWashington, is not clear what you are asking for or how you want this situation to be resolved. You need to think that through, and then see a lawyer. No one here can give you proper advice because we do not know the laws of your jurisdiction or the particulars of your grandmother's will, nor the exact terms of the reverse mortgage.

The next heir that still remains in the house is given the option to pay back the reverse mortgage. Equity does not apply to the mortgage, only if you sell it after you pay it. I've been learning about that since I'm facing a similar dilemma.

Good luck..

Yes, she had a Last Will in Testament. It was created in August of 1993. Only 3 people knew of this - my grandmother, the lawyer and myself. She gave me specific instructions at that time. First and foremost, I was not to tell my aunt and uncle about it. She felt she couldn't depend on them to care for the home after she died.

Even back then, my aunt and uncle lived with my grandmother rent free
(my uncle lived there on/off). They're not employed and have been receiving public assistance for years (both have had issues with drugs). Monthly expenses were being paid with my grandmother's SSI.

The funeral and burial were paid with life insurance. Although, my aunt was the main person taking my grandmother to doctor visits, does that mean she should be compensated financially? I don't believe so! especially since she's had free room and board for many years....that's the least you can do for your mother!

As for providing care, my uncle was the person being paid by an agency to care for her, which I didn't understand why he would be elected as the caretaker...probably because that added income would jeopardize my aunts welfare check? It just saddens me that, my grandmother's worries regarding her home have become reality!

She never benefited from this RM for any extra medical care etc.., no money was put into the home for upkeep. I think they split the money and were willing to let the bank take the home, unaware of the Will.

Just re-read this post, so many unknowns in all this.

POA was daughter & caregiver for her 87 yr old mother. Who knows for how many years as POA or for providing care, but if grannie was diagnosed in 2007, that alone is 6 years. A huge period of time to be a caregiver for someone with dementia. This site is filled with stories of just how difficult caregiving is for any period of time for those with dementia and aging. Was daughter being paid for caregiving? How were household expenses being paid? funeral & burial? who took the time and spent the costs to take her to doctors, etc? Debts? Were they at the bottom of their purses for funds and did the RM to make ends meet? Was the RM done to be able to compensate for caregiving or to repay for things the daughter & her hubs paid for? RM's seem to be done often when folks have themselves against a wall in needing funds with limited options. Did grannie need the RM $? We don't know what $ situation was for years & years.

POA's allow for a lot of discretion in actions, often for things that others within the family do not agree with. But that often is why a parents selects them over other sons or daughters or a nephew. Did anyone file an APS or other action, like file for guardianship, that showed prior concern that daughter was not a suitable POA?

Although it seemed initially odd that the daughter left, but perhaps not. If she was 24/7 caregiver for years in the home and then mother finally died, why would she need to stay at the home? Could daughter be emotionally & physically done, finished, put a fork in it and there's no cleaning up of the kitchen or cutting the yard ever again…..

Usually parents leave in their will, their assets to their children as heirs first. It seems odd that mom left her assets to a single grandson. But could be how the will reads.

But if there is no will, then most states have it such that all assets escheat to the state. Family has to establish lineal heirship to get the assets transferred to them; daughter and her siblings are in position #1 as a lineal heirs equally. If there was no will and no assets except for the house, then what they did with the RM was actually pretty clever as there now is nothing for an estate so no need for probate. They can let the mortgage holder deal with it.

It would be interesting to get details from both sides…...

It sounds like what your aunt did would be considered "theft by Power of Attorney" which is an actual crime in my part of the world (Ontario Canada). It would be considered theft because your aunt took the money for her personal use and not for some use that was in your grandmother's best interests, which is the only thing PoA is for. As beneficiary of your grandmother's estate, you have been cheated, because your inheritance will be less $$$, because the RM debt must be paid first, out of your grandmother's estate.

So, you need to contact a lawyer, and maybe the police. Get all your documentation in order to back up your claims. Do you know what your aunt did with the money? If she still has any of it, you may be able to get it back eventually. But you must act fast.

It is going to be an expensive mess to deal with whatever direction you take. What would you want to see done to make them "accountable"? A good attorney will find something to make their life difficult (like IRS filings by the executor to them for monies paid for the last year or couple of years) but if you want them to return all the $$ and pay off the RM and say their sorry and bad, not gonna happen. And it will be expensive for you to do this whatever the outcome.

With RM's, the debt service on them is very high. Sounds like the RM was done as a lump sum payment situation which has the highest fee structure. Do you have a copy of the RM agreement? You need to clearly read what the agreement was for. For HUD underwritten RM's, if you want to keep the house, you have to let the RM know within - I think - 30 days of death your intention on the property and then be able to within 6 months come up with the ability to be able to pay 95% of the FMV of the home under RM revised rules done in 2012. So would that be feasible? Feasible on your own $ without getting any $ back from your aunt & uncle? If you don't, the RM holder really doesn't care about whatever squabbles within the family or if auntie committed fraud (this probably will be hard to prove), they will seize the property - as probably is their right in the agreement - and place it on the market to sell. If she died 7 months ago, the window of opportunity on what you can do is limited now.

If your aunt was her POA, and the POA included finances, then she had the ability to do an RM for her as well as take all her $ from her account. Do you have a copy of the POA and what does it allow? Now was her taking all the RM $ ethical? not really but probably within her POA ability. The bank allowed auntie to do the withdrawal, so her signature was on the account.

Could APS be called in on this? Probably, but with grannie being dead, case closed as she cannot be interviewed or evaluated.

Would the AG's office be interested in this? For your aunt, not really. The AG would be more interested in going after the RM group for not properly vetting the RM applicant. You should look to see if the RM group is one which either your states AG's office or other states have gone after for consumer fraud.

Was an RM a good thing for an 87 year old to take out, definitely not but people take RM's out every day without truly understanding what they are doing. You would have to prove in court that the dementia was to the point that she was incompetent and not cognitive to make any decisions. It is hard to find doc's who will state these things for guardianship hearings and probably even harder for an after death situation. And then prove that auntie did all she did with malicious intent rather than just being simple or greedy.

Is there a valid will and are you named executor in the will? If not, then you are just a heir and whomever is named executor really needs to be the main point person on all this. You can be the one paying all the legal costs, but the named executor needs to take the lead. It is not going to be easy whatever you do.

@MaggieMarshall: Thank you!

Well, you've clearly been cheated. It WAS done to circumvent gram's wishes. Get your ducks in a row and go see an attorney soon. I wish you good luck.

Unfortunately, this is not the case. She passed away less than a month after the reverse mortgage was approved. My aunt and uncle lived like pigs and never used the money for any maintenance to the property, didn't pay the utilities and certainly didn't use any of the funds for extra care for my grandmother. If so, it would be easy to prove right? Instead, the money disappeared, and they did as well. Since I am the sole beneficiary, I've been left with 2 options: Sell the home to satisfy the debt or Pay the money back by taking out a traditional mortgage or using my own money. I'm not a lawyer, but I think Unjust Enrichment applies to this scenario. I want them held accountable for their actions.

As for getting the money back, I doubt that'll happen. This may have been auntie's way of circumventing their mom's wishes.

If, for instance, she left the house to her grandchildren, well, there'll be a home to sell and a mortgage to pay off from proceeds.

If she had it in trust for the grandchildren, same thing. The grandchildren would inherit the house as the contingent beneficiaries, and they'd be left with a house to sell and a mortgage to pay off from proceeds.

Even if you proved fraud, chances of actually getting that money back may still be slim. From what I'm reading about reverse mortgages, the maximum amount available for lending would be 80% of value. And the maximum one would be able to access in the first year would be 60%. nolo/legal-encyclopedia/reverse-mortgages-retirees-seniors-30277.html

If auntie and uncle were the inheritors of the house, no harm no foul. *shrug*



I still don't understand why gram's name needs clearing. Auntie and uncle were her children. If they've benefited from the reverse mortgage, and it allowed them to be happy just walking away from the house? They're actually pretty crafty.

It's not as if a reverse mortgage lets them borrow scads of equity out of the house. Maybe they needed that money to live on and support gram....?

The home is vacant now. Once she realized i found out about her dirty deed, she and my uncle left the property. These are my grandmother's two surviving children, and to have them take advantage this way is disgusting.

I assume your Aunt is living in your grandmother's house.... if so, your Aunt has to repay that Reverse Mortgage plus interest within a certain timeframe of your grandmother's passing... in some cases within 3 months or a year, depending on how the loan was written. If the loan isn't repaid, the mortgage company can force the house to be sold. Your Aunt might be in for a real surprise.

Or if your Aunt had already sold the house, then the mortgage company had already been paid back. No harm.

I think some people believe a Reverse Mortgage is free money, that it is coming from the equity in the house.... it's the equity that helped qualify for the *loan*, and it was the mortgage company money that was going to your grandmother.

As for clearing your grandmother's name, besides the mortgage company, only you and your Aunt know about the Reverse Mortgage. Or was something published in the media?

Your state attorney general will be happy to prosecute your aunt. And of course the loan company will be happy to call off the loan as soon as it is paid back. They have rights too.

Thank you! I'll continue my research.

Your grandmother's name doesn't need "clearing." Did anyone obtain guardianship for your grandmother? Hopefully, you can answer yes. And, hopefully, it wasn't your aunt.

I'm putting money on the theory that the counselling session on the phone was recorded. That can probably be subpoenaed.

This kind of garbage goes on all the time within families. It's not unusual. I'd advise you to seek out an elder law attorney, and see what (s)he has to say about it and what your next steps might be.