HECM & the Differently Abled

Amara Rose August 13, 2013 12

As an experienced loan officer, you understand the nature of aging and support your senior prospects and clients in making the best decisions for their lifestyle, health and well-being. Many seniors have chronic health conditions; according to Medicare data, 54 percent of people over 85 have at least four chronic diseases, and 25 percent have more than six. Aging in place — remaining in their own home until the end of their lives — is often the answer seniors have been searching for, even if this means having a live-in caregiver or making home modifications that will enable them to stay in the house they know and cherish.

But what happens when circumstances irreversibly change?

Physician David Hilfiker writes a blog called Watching the Lights Go Out, an astonishing real-time chronicle of the 68-year-old’s challenges with early stage dementia — and how little the medical profession is equipped to deal with it.

Disability can take many forms. Some people may have become differently-abled at a young age, such as the veterans in this video about the country’s first golf course for disabled vets. A disability may be due to an illness or accident that occurred later in life. But whatever the circumstance that caused it, once a senior is ready (or close to ready) to retire, if they’re considering a reverse mortgage they’ll want to know how it will affect their SSDI benefits and health care expenses.

These types of conversations can be fraught with legal landmines. As a reverse mortgage professional, do you know where to refer such prospects for advice?

Disabled seniors who are interested in a possible HECM might want to consult with an Elder Law attorney to determine whether and how a reverse mortgage would impact their benefits.

In terms of a slowly advancing disability such as early stage Alzheimer’s, it’s important to recognize when a client or prospect may need additional support. In the elderly, illness can often mimic symptoms of dementia, with disorientation caused by a physical issue rather than a mental one. If your client has previously chosen a power of attorney, and has a support team at home, they may be able to age in place even with dementia.

As Dr. Muriel Gillick writes, Life in the End Zone doesn’t have to be a downward spiral, even for those with advanced chronic conditions. People in the final phase of their lives can still prepare and depart with dignity and grace, even joy, if they are fully supported in their process. The more informed a loan officer can become about later life health issues, the more helpful you’ll be for the individuals and their families who need to be directed to the appropriate resources.

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  1. Ed Frankel August 13, 2013 at 8:07 am - Reply

    Amara Rose, one of the best post you put up.

  2. Amara Rose August 13, 2013 at 2:59 pm - Reply

    Thank you, Ed. We have one of your own to thank for the idea: loan officer Dick Diamond sent me the video link.

    Please feel free to send us ideas for topics you’d like to see covered, relevant links, etc. This is how I can serve you best.


  3. James E. Veale, CPA, MBT August 13, 2013 at 6:17 pm - Reply

    Ms. Rose,

    As Mr. Frankel states, this is definitely one of the best articles you have written. Great job!!!

    One additional thought, seniors who have entered into a power of attorney (“POA”) should first check with a reverse mortgage underwriter through a reverse mortgage originator to see if the POA is the proper type and what additional verification of competency at the time that the POA was created may be required.

  4. Amara Rose August 14, 2013 at 8:28 am - Reply

    Mr. Veale,

    I greatly appreciate your kind words and, as always, your invaluable addition to the post. I learn something from you every time.

  5. Rick John August 14, 2013 at 8:04 pm - Reply

    “if they’re considering a reverse mortgage they’ll want to know how it will affect their SSDI benefits and health care expenses.”
    Why did they tip toe around this issue? Give some guidelines.

    • Shannon Hicks August 15, 2013 at 10:15 am - Reply


      I absolutely agree. However for us our our writers to give specific legal advice is risky. I have personally closed several HECMs for those receiving SSI or Medicaid without jeopardizing their benefits. However to accomplish this I insisted that they first meet with an elder law attorney or someone that is a certified public benefits specialist. The guidelines typically center on the maximum assets (cash in bank) allowed each month. Those who meet with a professional first can often structure their HECM payouts or line of credit to both eliminate their existing mortgage payments and give them access to much needed money for home improvements or auto repairs. Most were advised to spend the money in the same month they took the draw from their LOC.

  6. Dick Diamond August 15, 2013 at 7:19 am - Reply

    This article is definitely one of your best yet. Your personal research into the topics, also known as “due diligence,” adds a lot of credibility to what you have to say.

    I thought James Veale added a very valid point that has more often than not been a sticky issue with underwriters who examine POA documents. They want some measure of proof that the individual was mentally competent at the time the POA was signed.

  7. Amara Rose August 15, 2013 at 1:18 pm - Reply

    Thank you, Dick! I appreciate you pointing me to the video that led to the idea for the post, and all your subsequent valuable blog post suggestions.

    Warmest regards,

  8. Rick Mcinturff August 19, 2013 at 11:45 am - Reply

    Unfortunately there are doctors at the VA that will no longer provide a letter to the effect that when the POA was being put in place the borrower was competent. That letter is so important for the child/spouse/caregiver’s/loan officer to show legitimacy to the underwriter in these instances and without it we have to tell the family we can’t help them.

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