Reverse Mortgage May Affect Your Eligibilty for Federal Assistance

While reverse mortgages have been a gift for many seniors, the increase in income can adversely affect some the eligibility for many seniors looking to qualify for government assistance.  This only make sense right?  If your eligibility for Medicare was high with modest income, it should inversely shrink with the rise in income from a reverse mortgage.

For example, reverse mortgages may have tax consequences, affect eligibility for assistance under federal and state programs, and have an impact on the estate and heirs of the homeowner.

Getting additional income for daily living out of the home that’s paid for may sound great, but it’s important to understand what you are doing and how it affects your financial situation. If you consider reverse mortgage an option to explore, seek help for an unbiased opinion of the consequences both the pros and the cons. There are trained Home Equity Conversion Mortgage counselors (HECM) available to help. Throughout the country, many of them work for community action agencies.

Always consult a financial planner, tax consultant or personal attorney before considering a reverse mortage.  The $500 or so fee a professional may charge could save you hundreds of thousands down the road.  And if you can not afford to pay for a professional, consider consulting local community assitance programs funded by the governemnt or non profit industries.

Elderly Woman Scammed for $100K Reverse Loan

Elder scams
Elder scams

With the economy continuing to search for footing, fraud and scams are on the rise in the United States.  One of the easier groups to target are seniors, whom despite losing thousands in the values of their homes still have a disproportionately higher amount of equity than the average American.   One man in St. Paul allegedly took advantage of his elderly mother.

A St. Paul man is charged with theft by swindle, for allegedly taking money from his 83-year-old mother and neglecting to pay her nursing home bills.

Larry John Bekis was charged Thursday in Ramsey County District Court.

The case is the first to be prosecuted by the new elder abuse unit of the Ramsey County Attorney’s Office.

Investigators said Bekis’s mother was placed in the Rose of Sharon nursing home in Roseville in October 2006 with progressive dementia. She had given her son power of attorney.

The criminal complaint said Bekis allowed nursing home bills to pile up to $49,000. And he took out a $100,000 reverse mortgage on his mother’s home, and never paid it back. He also allegedly collected his mother’s Social Security and pension checks.

For the majority of house who are resposinble and would not look to cheat our parents, considering taking steps through attorneys to safeguard their assets today.