I Need Some Real Estate Advice for a Relative in Trouble

[Jeff S.]

The husband of a distant relative of mine died suddenly some months ago and she is now the sole owner of their home located in a very nice area, just north of New York City, and worth around $875k. The good news is the mortgage, which apparently was a BofA refi, has only about $200k left on it, so there’s a lot of equity. The unfortunate news is that he was the sole breadwinner, she has absolutely no income, and hasn’t made a mortgage payment in 5 or 6 months. These are about $3200/month including property taxes, on what I believe she said was a 6% note.

The two options I see are to sell and move into an apartment or possibly (gulp) a reverse mortgage. She really really wants to stay in the house but will need money to live and pay the not-so-insignificant property taxes, among all her other expenses. Her daughter will be helping her apply for some sort of property tax relief which, they indicated, NY offers to the aged – not that this will help if she can’t pay it anyway.

Also, the sense I got was that she hasn’t talked to the bank at all, though I assume they’ve tried to call her.

Any other thoughts on what she could do to stay in the house and extract some equity to live on? How should she approach BofA? Thanks.

Jeff

[Account Closed]

There are way too many variables and possibilities here to really make any good suggestions. IMO and experience the biggest issue isn't your relative staying in her home but planning for her economic future with assets left to her and no income. I encounter many women in this position and it's depressing. Inheriting more than a half million dollars in equity shouldn't be depressing, but I've seen even that amount totally wasted in a couple of years. People with limited financial skills will lend it to family or buy bad investments.

Where are her close family members or this women's children, if any? Is there is anyone who can step up and get this woman the legal and financial planning services she needs. Believe me, she needs it.

A senior with equity wanting to stay in a home can consider a reverse mortgage. There are other loan possibilities, but there is the question of income. Are there social security benefits or pensions or life insurance from her deceased husband? Who lives in the house? Is there anyone that is disabled, either her or any of her adult children? What's her current health insurance status? Does she have Medicare? Has she ever had Medicaid? Was her deceased spouse a Medicaid recipient?

See how complicated this is? She needs help from an advocate on the scene. She may qualify for county services, such as a senior advocate, or depending on her situation, a conservator. If you really want to help her, suggest to your family that she needs someone nearby who can be on it intensively in the beginning, or hire her the professional services she needs.