by Katie Burns, J.D., Attorney, Housing Counselor, & HUD Certified Reverse Mortgage Counselor

To protect client confidentiality, all names have been changed in this post.

Anne is a 79-year-old Southfield resident, retired registered nurse and homemaker. She is also the full-time caregiver for her mentally challenged adult children, and the legal guardian of her three-year-old grandson. After she retired, she was struggling to pay her bills on time and knew she needed to supplement her income. Then she heard about reverse mortgages and decided that getting one would help meet her needs.

FHA’s government insured Home Equity Conversion Mortgage (HECM) loan program gives seniors like Anne access to the existing equity in their homes, while allowing them to continue living there until they die or decide to move. It can be a viable option, provided that the senior can still afford the property taxes, homeowners’ insurance and home maintenance required to keep the loan out of default. In Anne’s case, she did fulfill those requirements for the first few years and her reverse mortgage was in good standing.  But then life happened.

In 2012, Anne’s daughter Jane was diagnosed with stage 2 breast cancer. Since then, she has had her ovaries removed, a mastectomy, and several other surgeries to halt the spread of the disease. It has been a struggle for Anne to care for an active toddler, manage the family finances, and provide guidance and emotional support to her children, all while dealing with her own debilitating arthritis and diabetes.

By the time I spoke to Anne in August 2014, she was mentally exhausted and stressed out. She owed over $18,000 for back and current-year property taxes and had no hope of being able to pay. “I was actually trying to figure out what size apartment I could afford,” she admitted, “and I was feeling really down.” It would have been devastating to uproot herself and her family from the home where she had lived for the past decade, especially while Jane was still undergoing treatment for cancer.

Fortunately, the Step Forward Michigan program recently began accepting applications from homeowners in reverse mortgage default. Step Forward Michigan is a program of the Michigan Homeowner Assistance Nonprofit Housing Association (MHA), and part of the Hardest Hit Fund loan program established by the US Department of Treasury in 2010.  Michigan homeowners who meet certain qualifications can receive a forgivable loan and mortgage lien of up to $30,000, without having to make any payments.  The loan is then forgiven at a rate of 20% per year, provided that the homeowner maintains the property as his/her primary residence.

Through the services provided by HRCMI, the Housing Rights Center of Michigan (a program of Elder Law of Michigan), I helped Anne complete the Step Forward application online, monitored her progress, and stayed in constant contact with her during the two month process. Eventually she was approved for $18,700, which paid for her 2014 taxes and reinstated her reverse mortgage.

Today, Anne and her family are still living in their home, and Jane’s cancer is in remission. Through some smart budgeting decisions, Anne’s financial situation has also improved, and she plans to set aside money for her 2015 taxes. “I realize now that some things are more important than others,” she said. “Cable was the first thing to go.” She also cut her phone bill by over $100 a month by switching companies and getting fewer perks.

Regarding her experience with the Housing Rights Center of Michigan and Step Forward Michigan, Anne had this to say: “I can’t thank you and your [organization] enough. Step Forward was really a godsend for me, and I appreciate that you stuck with me throughout the whole process.  If I hadn’t been approved, I don’t know where we would be right now.”

For more information on the HECM reverse mortgage loan program, read the National Council on Aging’s “Use Your Home to Stay at Home.” For more information on the Step Forward Michigan program, visit their website.

Katharine (Katie) Burns is an attorney, housing counselor and HUD certified reverse mortgage counselor at ELM.  She became a member of the ELM team initially as an AmeriCorps State Member in 2013, but she was hired for her current position in September of 2014.

In 2010, Katie graduated from Regent University in Virginia Beach with her Juris Doctorate (Cum Laude).  Prior to coming to Elder Law, she did a variety of document review projects for other attorneys, and donated her time to Legal Services of South Central Michigan as a pro bono attorney.  She also assisted with the intake and triage process for new clients.

During Katie’s AmeriCorps service year at ELM, she was the Foreclosure Prevention Manager, and provided foreclosure prevention services and outreach to clients in ELM’s housing target area.  Currently, she provides housing counseling and legal advice to seniors in Michigan, and HECM (reverse mortgage) counseling to seniors around the country.