Posted by Rick, the Probate Guy on July 15, 2009 at 17:38:53:
Georgia - I have dealt with this exact situation perhaps 150+ plus times in the past. While I don’t believe you were suggesting that I’m not compassionate, I do think that your solution is somewhat naive.
One of the services that my company provides are Reverse Mortgages. There are essentially three primary lenders who form an oligopoly in originating approximately 95-97% of all R/M’s nationally. Virtually all of us broker these products at the retail level. Since a large part of our business is related to professional fiduciaries, public admins and conservators, we are at the top of the go-to heap for such services in CA.
However, I’ve never personally liked the product and believe that the benefits to a family such as the original poster describes are very limited; perhaps even misleading. The amount of proceeds will vary depending on the age of the borrowers, the property condition (fix-up holdbacks are common for deferred maintenance) and the kicker is that once you’ve ‘sold your soul to the R/M devil’, your choices and flexibility are essentially gone as there’s no future sale permitted without an incurable breach (balloon payment upon sale, death or extended absence).
We continue to offer the product as it does have its application, however these are limited and I have no problem telling a prospect that there are often better ways of addressing liquidity issues. R/M’s are not the great solution the promoters suggest.
So, back to square one: find out what the family can afford, what the other offsprings are willing to do, engineer an intelligent solution, get the family to agree to the plan, and stay transparent.
BTW, there’s nothing wrong with being compensated (perhaps WELL paid) for helping people. I’ve dealt with literally thousands of very sad cases that I seriously doubt well-meaning but unknowledgeable do-gooders would have made worse. I get to chose which files I charge and which ones I do for ‘for fun and for free.’