Loan officer: John Holmgren, Holmgren & Associates.
Property type: Single-family home in Richmond.
Property value: $660,000.
Loan terms: FHA Home Equity Conversion Mortgage: Annual adjustable rate loan starting at 4.195%.
Initial loan balance: $251,000.
Line of credit: $116,000.
Back Story: My client lives in a home that she purchased with her deceased husband. Living on small pension and Social Security benefits, she had gradually accumulated substantial credit card debt. On top of that her home had significant deferred maintenance. She contacted her real estate agent to help her evaluate the idea of selling her home and buying a new home for all cash so that she would no longer have a mortgage payment. The agent advised her that because of the property condition her probable selling price would be too low to achieve her objectives.
Knowing that it was her client’s strong desire to remain in her home, the agent suggested that she contact me to discuss whether a reverse mortgage would benefit her enough to allow her to pay off her mortgage and other debts while making needed improvements to the home.
The agent didn’t know that her client had already applied with a major reverse mortgage company that has high visibility because of the amount of television advertising it does. The client had applied to this company and been turned down because of the property condition. For this reason the client had determined that selling was the only option. Her agent advised her to call me anyway to get another opinion because of my reputation in the marketplace as a problem solver.
When I visited her home I could see why the lender she had worked with had not liked the...
