PRESENTED BY THE PASS GROUP AND FUNDED BY H.O.M.E . ’S CRISIS

INTERVENTION GRANT FROM THE ATTORNEY GENERAL’S OFFICE

H.O.M.E.

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HomeCorps

Attorney General’s office.

Statewide foreclosure prevention and support initiative.

Homeowner Options for Massachusetts Elders (H.O.M.E.)

Nonprofit HomeCorps grant to

increase its capacity to serve elders who are in danger of displacement due to foreclosure and debt.

The PASS Group: conducting the outreach part of the grant.

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What is H.O.M.E.

30 year old statewide nonprofit organization based in Lowell

Designated a statewide foreclosure prevention center for seniors by Mass Division of Banks

Has served over 26,000 senior homeowners

Counselors assist elder homeowners in danger of displacement, and to remain safely in their home , if possible

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H.O.M.E.’s GOAL

To reach elders sooner before displacement.To partner with other agencies.To help seniors remain in their homes.To help elder homeowners become financially

stable.

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Who is Eligible

60 years of age or older, 50 if in foreclosure.Massachusetts homeowner with one

residence.Income at or below $30,000 for an individual,

$40,000 for a couple.Assets less than $80,000 not including the

home and personal possessions and one car. (This is a guideline depending on circumstances.)

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Client Profile

Average age: 79 years old

Average income: $18,000

Average credit card debt: $10,500

Average home value: $260,000

77% are single elderly women

78% live in a mortgaged property

Little or no savingsHome is the only

asset65% are in jeopardy

of losing their home

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Why Displacement Happens

DisplacementDebt

Basic needs

Home repair

Mortgage Healt

h care

Taxes

Bills

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Massachusetts Trends*

*Living Below the Line: Economic Insecurity Among Massachusetts’ Elders, WOW, Spring 2014

63% of senior households in Massachusetts are financially insecure.

Elders with mortgages spend 2 ½ times more on housing than those without.

Almost 45% of senior homeowners spent 30% of income on housing.

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National Trends*

Many more seniors with mortgages than a decade ago.

Less equity in their home than expected and less net wealth.

Rate of homeownership for 65+ is the same but number of mortgages has risen.

Seniors did not bounce back from economic bust.

Refinancing trends.More opportunities

to borrow against their home equity.

*Snapshot of Older Consumers and Mortgage Debt, Office of Older Americans, Consumer Financial Bureau, May, 2014.

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Mortgage Trends*

Percentage of 65+ seniors with mortgages increased from 22% to 30% from 2001-2011.

Percentage of 75+ seniors with mortgages doubled from 2001-2011.

Median amount owed on mortgages for seniors increased 82% from 2001-2011.

*Snapshot of Older Consumers and Mortgage Debt, Office of Older Americans, Consumer Financial Bureau, May, 2014.

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Types of Foreclosure

Mortgage • Fail to pay mortgage, taxes, insurance

premiums, allow property to deteriorate

Tax Title • Fail to pay property taxes

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Foreclosure timeframe

1. Breach of Mortgage – not paying the mortgage for 30-90 days

2. Default letter from the bank3. 150 day Right to Cure, BUT interest and

costs continue to accrue4. Complaint is filed by the bank to foreclose5. Publication of Notice of the foreclosure in

the newspaper6. Auction – publication and sale

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Services

•Create a financial picture•Meet the elder in their home

•Build a budget•Identify eligibility for public benefits

•Recommendations to make home expenses affordable•Create a long-term plan

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Making the home affordable

Future

H.O.M.E. analyzes appropriate remedies.

They assist with: mortgage modifications real estate tax relief and

loan deferral other methods for managing

the debt Conventional, portfolio &

elder equity conversion as last resorts

Create a remainder of life plan for the future

Saving the Home

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Reverse MortgagesBasics

•loan for homeowners which permits them to convert home equity into cash.What

•the homeowner borrows money based on the appraised value, homeowner’s age and bank interest rate

How•the loan is paid off when the homeowner dies, no longer lives in the house or defaults the loan; or in the case of a term reverse, when the term expires.

Pay it Back

•pay all property taxes, and homeowners insurance, maintain home, live in the home as their principal residence.

Requirements

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Reverse MortgagesThey’re not for everyone!

Costs: HECM: substantialUninsured: costs

less

Interest and Fees:

Interest compounds monthly.

HECM has Mortgage Insurance

and service fees. Not Enough: the loan may not cover bills, and if

you default on your obligations, the

bank can foreclose on your house.

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Stages of Distress

Serial refinances

Abuse of credit cards

Borrowing from friends and relatives

Early Debts are unmanageable

Long term Displacement Displacement 1-2 years away

Near Term Displacement Debt, taxes overdue and in foreclosure process

Displacement Foreclosure is imminent

Early Displacement Signs

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Bills & Finances Home Family

Mounting/overwhelming consumer debt

Large utility debts Adult children living in the home, not contributing to household

Using credit cards to pay everyday expenses or buy groceries

Deferred maintenance Raising grandchildren

Unpaid and unopened bills Unaffordable barrier alterations needed

Co-signing loans for family members

High health care and prescription costs

Family financial abuse

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Displacement Signs

Late on Mortgage payments Certified notices or registered letters

Behind on fees and bills Loss of tenants or charging below market rate

Credit card debt No homeowners insurance

Back Tax payments Overwhelming home repairs

Refinancing multiple times

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H.O.M.E. Team Counseling Case Management

Senior Service Agencies to help H.O.M.E. identify seniors early within their caseloads

Earlier help = greater options

H.O.M.E. to help support clients already receiving services from agencies

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Tax Foreclosure Case

Mr. D

Hospitalized for 6 months

Unable to work Rents out room in his

house Payment plan for utilities Unpaid real estate taxes

- $55,000 +interest & costs

Judgments: $7,800 and $9,700

H.O.M.E.

In-home meetings Financial picture Budget created HOME elder equity

conversion loan to pay off tax lien, back taxes and judgments

Future plan: will move to senior housing or rental property.

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Displacement Case

Mrs. B

71 years oldMobility issuesWorks part-time and

gets Social SecurityProblems with home

maintenance, repair and basic living costs

Problems meeting mortgage payments -usually 1 month behind.

H.O.M.E.

In-home counselingEligibility for: property

tax relief, fuel assistance.

Eligibility for disability home modification loan program

Helped find attorney to file for bankruptcy.

Working with her to modify her loan

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Reverse Mortgage Case

Ms. M

Lives alone in a family home Took mortgages to help

parents pay medical bills Bad advice on a HECM

mortgage. Used $67,000 of retirement Tax penalty of $15,000 for

early withdrawal. $15,000 plus in closing costs. Net insufficient funds from

loan to maintain tenure in home.

H.O.M.E.

In-home counseling obtained 2 lawyers

for her to bring a claim against the lender, but unsuccessful in challenging the loan. Maintaining her financial health has a bleak outlook.

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H.O.M.E. Interagency Referral Form

REFERRING AGENCY

CONTACT PERSON

PHONE NUMBER & EMAIL

NAME OF CLIENT

CONTACT PERSON

ADDRESS & PHONE NUMBER

NATURE OF PROBLEM

I heard about H.O.M.E. through:

H.O.M.E. training □ Website □

Another Agency □ Colleague □

Referral Release Form: I, _______________________________, give Homeowner Options for Massachusetts Elders (H.O.M.E.) permission to contact me for the purpose of providing homeowner counseling services. Signed: ___________________________________ Date: ____________________________

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How to Reach H.O.M.E

H.O.M.E.87 Hale Street

Lowell, MAPhone: 800-583-5337Fax: 978-970-0015

www.elderhomeowners.org

Presenter: Nomita Ganguly, The PASS Groupnganguly@verizon.net