1. 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.

2. HomeCorps 2 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.

3. What is H.O.M.E. 3 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

4. H.O.M.E.’s GOAL 4 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.

5. Who is Eligible 5 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.)

6. Client Profile 6 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 savings Home is the only asset 65% are in jeopardy of losing their home

7. Why Displacement Happens 7 Displacement Debt Basic needs Home repair Mortgage Health care TaxesBills

8. Massachusetts Trends* *Living Below the Line: Economic Insecurity Among Massachusetts’ Elders, WOW, Spring 2014 8 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.

9. National Trends* 9 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.

10. Mortgage Trends* 10 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.

11. Types of Foreclosure 11 Mortgage Fail to pay mortgage, taxes, insurance premiums, allow property to deteriorate Tax Title Fail to pay property taxes

12. Foreclosure timeframe 12 1. Breach of Mortgage – not paying the mortgage for 30-90 days 2. Default letter from the bank 3. 150 day Right to Cure, BUT interest and costs continue to accrue 4. Complaint is filed by the bank to foreclose 5. Publication of Notice of the foreclosure in the newspaper 6. Auction – publication and sale

13. Services 13 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

14. 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 14 Saving the Home

15. Reverse Mortgages Basics 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 15

16. Reverse Mortgages They’re not for everyone! Costs : HECM: substantial Uninsured: 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. 16

17. 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 17

18. Early Displacement Signs 18 Bills & FinancesHomeFamily Mounting/overwhelming consumer debt Large utility debtsAdult children living in the home, not contributing to household Using credit cards to pay everyday expenses or buy groceries Deferred maintenanceRaising grandchildren Unpaid and unopened billsUnaffordable barrier alterations needed Co-signing loans for family members High health care and prescription costs Family financial abuse

19. Displacement Signs 19 Late on Mortgage paymentsCertified notices or registered letters Behind on fees and billsLoss of tenants or charging below market rate Credit card debtNo homeowners insurance Back Tax paymentsOverwhelming home repairs Refinancing multiple times

20. H.O.M.E. Team Counseling Case Management 20 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

21. Tax Foreclosure Case 21 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.

22. Displacement Case 22 Mrs. B 71 years old Mobility issues Works part-time and gets Social Security Problems with home maintenance, repair and basic living costs Problems meeting mortgage payments - usually 1 month behind. H.O.M.E. In-home counseling Eligibility 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

23. Reverse Mortgage Case 23 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.

24. 24

25. How to Reach H.O.M.E 25 H.O.M.E. 87 Hale Street Lowell, MA Phone: 800-583-5337 Fax: 978-970-0015 www.elderhomeowners.org Presenter: Nomita Ganguly, The PASS Group nganguly@verizon.net