Soon after Judy Stephens, of Lafayette, La., lost her husband in January, she got hit with more bad news, this time from the mortgage company. She needed to come up with $107,000 — the amount of principal, accrued interest and fees racked up by the reverse mortgage on the home she owned with her husband for the past 16 years — or face foreclosure.
She didn’t have the money, nor could family members come up with the cash needed to buy the house. So, Stephens told me last week, the mortgage company informed her that it would foreclose in mid-August.
Why? Because like an estimated 12,000 other widows and widowers around the country, Stephens, 65, is a “surviving spouse” whose name does not appear on the reverse-mortgage note. Though she and her husband, Raymond, had been assured multiple times since 2009 by loan officers and others that in the event of her husband’s death, she could continue to live in the home indefinitely, the reality turned out to be starkly different. She was not protected.