The premise of a “reverse mortgage” sounds hard to beat: Sell your home and live there, too. Leave the home, however, as Raymond Rosen did when he entered a nursing home, and you might not be able to come back.
Rosen, who along with his wife Rose took out a reverse mortgage on his home at 130 Brooklawn Circle in Upper Westville in 2004, lost it to foreclosure Saturday. The bank holding the mortgage, Financial Freedom Senior Housing Corp., was the only bidder, taking the property for $194,000.
In a reverse mortgage, the lender agrees to pay the homeowner/borrower either a monthly amount or a lump sum, and in return the homeowner is allowed to remain in the home. The lender, in turn, gets title to the house when the owner moves out or dies.
The definition of “move out” can, as in Rosen’s case, include those who must leave for health reasons.
Attorney Pasquale Young (pictured above), who handled the public auction of the property for the court, said the bank’s bid, which represented more than the fair market value of $175,000, scared off several other potential bidders.
“A few people called,” he said, “and when they heard that number they backed off.”
Neighbors, he said, had told him the house had been vacant and padlocked for at least a year. No one had a key.
Attorney Dan Blinn, managing attorney of the Hartford-based Consumer Law Group, said the case raises questions.
“For one thing, in situations like this where the homeowner’s in a nursing home, I always wonder whether they even got notice of the lawsuit,” he said. “They could have just left a notice on the door.”
Rosen, whose wife died in 2005, did not appear in the foreclosure case to defend himself.
While appropriate for some, Blinn said, reverse mortgages do come with potential pitfalls.
“Reverse mortgages aren’t like some things that are almost always scams. They are good for some borrowers,” he observed. “But they’re typically good for people who plan to be in the home for a long time, so it makes sense to get a reverse mortgage rather than just sell.”
Previous Independent coverage of New Haven’s foreclosure crisis:
• Foreclosure Law Has Her Back
• Who Pays The Pawn Shop?
• Foreclosed House Flipped, Then Burned
• Foreclosure Purchase keeps Tomatoes Alive
• Rerun On Atwater Street
• City Left Holding Foreclosed House
• WPCA Fails To Uproot Family
• A New Haven Dream Foreclosed
• This Is The Face Of Deutsche Bank
• Out-of-Town Bankords Respond To Call
• Banks Duck City On Foreclosed Homes
• Rescue Squad Hunts For “Tipping Points”
• John Wins A Loser
• Still A Bargain, Foreclosure Price Zooms
• Flippers Get 2nd Shot At Fixer-Upper
• Suburban Cop Finds A City Steal
• Absentee Banklords Thwart Foreclosure Sales
• City Forecloses On 40 Lots
• Crowd Seeks Cure For “Mortgage Distress”
• Donovan: “Help Is On The Way”
• Judge Forces WPCA To Give Mom A Chance
• WPCA Uproots Tenants, Too
• Home-Rescue Squad Ignores WPCA
• Sewer Agency Unloads House
• Foreclosure Evictions Halted
• Let The Bank Have It, This Time
• Hazel St. Sale Reflects Economic Climate
• Hill Foreclosure Triggers Memories, & Prayers
• Foreclosure Fee-Slashing Judge Leaves Town
• She’ll Be Watching Deutsche Bank
• A Last Pre-Foreclosure Look At A Lifetime Past
• New Yorker Snags Foreclosed-Upon Gem
• Foreclosure Dream Goes Sour
• Judge Slashes Foreclosure Bounty
• Tax Break Saves Woman’s House
• Bank Replaces “Gunshot Alley” Landlord
• Foreclosure Bill OK’d
• Singh Seeks Home For A Song
• Foreclosure’s Neighbor Worries More About Speeding
• Networking Replaces Foreclosure at Christy’s
• Foreclosure Bargain—& Renewal—Jeopardized
• Bank Outbids Akbar; Family May Keep Home
• “So Don’t Worry About Pablo”
• Bankruptcy Postpones Foreclosure
• Next-Door Foreclosures, 53 Years Apart
• They Met On Foreclosure Way
• Little Garage Draws Big Bids
• A 2nd Chance on Lewis Street
• Foreclosure Attracts New Breed of “Specialist”
• In Foreclosures, Judge’s Hands Tied
• Home Saved From Foreclosure. Cycle, Too
• A House For Precious?
• Deutsche Bank Grabs Dixwell Condo
• Reluctant Bidder Snags F. Haven Bargain
• Well, There’s Always Powerball
• Neighbors Retrieve Home From Bank
• Somebody Has Plans For Bassett Street
• Foreclosed, the Khennavongs Leave the Santanas
• Foreclosure Steal May Be Too Good
• 2nd Foreclosure in 3 Months Dims Bright St.
• After Foreclosure, W’ville Owner Still Hopes To Sell
• He’s Not Buying, Yet
• Quiet Foreclosure on Porter Street
• 3 Minutes Too Late
• Historic Gambardella Property Foreclosed
•2 Homes Lost, 1 Gained
• “Everybody’s Got To Eat”
• More Foreclosures, More Signs
• Foreclosure Sale Benefits Archie Moore’s
• Rescue Squad Swings Into Action
• A Bidder Shows Up
• Bank Beats Tanya’s Bid
• Westville Auction Draws A Crowd
• DeStefano: Foreclosure Plan Ready
• Can They Help?
• “We Should Over-Regulate These Bastards”
• Rosa Hears of Rescues
• WPCA Grilled on Foreclosures
• WPCA’s Targets Struggle To Dig Out
• Sue The Subprimers?
• WPCA Hearing Delayed
• Megna’s “Blood Boils” at WPCA Tactics
• Goldfield Wants WPCA Answers
• 2 Days, 8 Foreclosure Suits
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
• Renters Caught In Foreclosure King’s Fall
• She’s One Of 1,150 In The Foreclosure Mill
• Foreclosures Threaten Perrotti’s Empire
•“I’m Not Going To Lay Down And Let Them Take My House”
• Struggling Couple Sues Over “Scam”
To learn about the ROOF Project, a community-wide effort to help New Haveners navigate the foreclosure crisis, click here.
The following links are to various materials and brochures designed to help homeowners avoid foreclosure.
How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.
For lawyer referral services in New Haven, call 562-5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.
Click here for information on foreclosure prevention efforts from Empower New Haven.