The Greenwich millionaire and other reverse storiesBy Atare E. Agbamu, CRMSreverse mortgage, senior financing, senior education
Editor's Note: The names in this article have been changed
to protect anonymity.
Patrika Olson is a mother of four adult children and a
grandmother of six. A retired Wells Fargo personal banker, the
69-year-old Cottage Grove, Minn. resident called me about doing a
reverse mortgage last September. I took her application in November
and we closed the loan in January of this year.
A few weeks after the closing, I talked with Mrs. Olson about
the impact the reverse mortgage has had on her life as a widow in
retirement. Our conversation is included in my upcoming book,
"Forward on Reverse: A Guide to Marketing and Originating
Reverse Mortgages for Mortgage Professionals and Senior
Advisors" (The Mortgage Press, 2005).
In addition to her own insightful and refreshing reverse
mortgage story, Patrika Olson shared three stories with me that I
want to share with you. Here is the first story in Pat's own
words:
"Unfortunately, this lady passed away a couple of months ago.
She had lived in Greenwich, Conn., in a $3 million-plus home [the
home is paid for, according to Pat]. She was getting to the point
where she could not pay her insurance and her taxes. She and her
friends seemed to have the same concept that I had, or that so many
people have, about reverse mortgages. I mentioned the possibility
of reverse mortgage and it was like I was telling her to jump off
of the Brooklyn Bridge or something.
"But, unfortunately, like I said, she passed away. She was only
72 years old and I don't think that's very old anymore. There she
was, living on a piece of property that is worth millions of
dollars, and yet she was stressed because her monthly income wasn't
allowing her to pay the taxes and insurance."
I suggested that financial worries may have contributed to the
deterioration of her acquaintance's health and her untimely death.
"In this case, I absolutely believe that could have been a factor,"
Olson said.
I mentioned that there are probably millions of elders across
America in situations similar to that of her late acquaintance from
Greenwich. In light of her acquaintance's painful story, I said to
Pat that educating seniors and their advisors (children, friends,
relatives, lawyers, accountants, bankers, mortgage brokers, etc.)
about reverse mortgages is urgent and important work. She agreed
with me and shared a second story:
"I have this very part-time job that I go to, and I ride the
bus. There is a woman on the bus who has been a widow for about
eight years, she lives in a home that is probably worth a couple of
hundred thousand dollars, at least in Cottage Grove [a St. Paul,
Minn. suburb], and it's paid for. But she works full time because
she thinks she has to. She certainly isn't enjoying life. She's
very negative, kind of bitter about the fact that she was left and
now doesn't have enough income to support herself, to be able to
stay in her home. But she's bound and determined; she wants to stay
in her home.
"I mentioned reverse mortgages to her. Once again, she looked at
me like I was crazy. She's not in a situation like mine, where
she's terribly concerned about leaving some big inheritance to her
children; but at the same time, she's very, very skeptical about
anything that tells her part of her home is going to be mortgaged
again.
"I don't know where to begin with the whole education thing, but
I think older people have to know about [reverse mortgages] to set
the record straight."
It is not just older people who have to know about reverse
mortgages. Every person and every professional who deals with an
older person has to know about them. Again, this includes mortgage
and other financial professionals, lawyers, nurses, geriatric
workers, home healthcare providers, children, grandchildren,
pastors, rabbis, imams and doctors, who are collectively called
"senior advisors" in my book.
We all have to know this simple truth that reverse mortgages
have brought to light: For older people everywhere, where there is
home equity, there is hope in retirement. That leads me to Pat's
third story:
"A friend of mine has been doing some repair work for us for a
number of years and I have gotten to know him. His mother had a
situation where she needed an extra $100 per month to get by on her
daily living. Her family checked into a reverse mortgage for her.
They chose the program [cash advance or payment option] where she
gets a monthly check that supplements her income. Her children are
very, very happy; now they know that she's comfortable living where
she's living."
Atare Agbamu is president of ThinkReverse LLC, a reverse
mortgage training and consulting firm based in the Twin Cities and
is a consultant with Credo Mortgage. Atare is regarded as an
emerging authority on reverse mortgages and is frequently consulted
by financial professionals and families across America. His reverse
mortgage interviews have been webcast on MortgageMag Live! He can
be reached by phone at (651) 389-1105 or e-mail
[email protected].
