Meet Melvin and Ronnie
Melvin, a senior living on Social Security, and Ronnie, who has been disabled since birth with Down’s Syndrome, are brothers. Ronnie was cared for by their mother, Vivian, until she became ill. Melvin moved into the family home to take care of both of them. Before Vivian died she took a reverse mortgage on the home. A reverse mortgage is a loan made to a senior citizen homeowner where she has to make no more mortgage payments as long as she lives in the home. When the homeowner dies, the entire loan balance becomes due, and if it goes unpaid by the heirs, the bank may force a foreclosure and sale of the home. But since property values are often far lower than the loan balances, heirs can satisfy the mortgage and keep the home if they can pay 95% of the market value of the property. Unfortunately, banks often illegally deny the heirs this right to save their homes.
When Vivian died, their house went into foreclosure. The bank ignored Melvin’s numerous attempts to resolve the matter for over a year, and demanded $193,000 to satisfy the loan and avoid the foreclosure sale. The property value was appraised at about a quarter of that, meaning they could legally pay it off with only about $50,000. With the help of LAF Supervisory Attorney Michelle Weinberg, the bank finally agreed to accept the $50,000. Another brother, who lives elsewhere, took out a mortgage on his own house to raise the $50,000 and ensure a comfortable and safe home for Melvin and Ronnie.