PROVIDENCE, R.I. (WPRI) — Anne DeRotto is locked in a battle to save a home that’s been in her family for decades.
“I grew up here, was married here, had kids here,” she told Call 12 for Action.
When DeRotto’s father passed away, DeRotto discovered there was a reverse mortgage on the property.
“I don’t know what a reverse mortgage was,” she said. “I never knew about it.”
Odette Williamson from the National Consumer Law Center said similar situations play out across the country.
“In a lot of instances that we’ve seen, the family members were simply not aware that there was a reverse mortgage on the home,” Williamson said. “Especially if you are looking to pass your home onto your heirs, this is simply not a product that’s good for you.”
Reverse mortgages allow adults 62 and older to cash out equity in their homes. Typically, the loan comes due when the borrower dies or moves out of the property. Homeowners can also face foreclosure if they don’t meet the terms of the mortgage.
“There’s been a significant uptick in the number of older homeowners who are losing their homes, who have reverse mortgages and have fallen behind on their property charges—their taxes or the insurance, for example,” Williamson added.
According to data from the U.S. Department of Housing and Urban Development (HUD), about 95,000 federally insured reverse mortgages failed from 2013 through 2017. About 9% of those ended up in foreclosure because the homeowner didn’t pay property taxes or insurance, according to HUD.
“If you have a reverse mortgage, it is not simply a carefree product,” Williamson cautioned. “It’s something that you have to keep on top of.”
Though DeRotto has received a stack of foreclosure notices, she is determined to save her father’s property.
“This was my family’s home and I’m going to fight for it no matter what it takes,” she said.
The lender did not respond to Call 12 for Action’s repeated requests for comment.