| Genworth Financial Services |
| Genworth Financial Services Made untruthful statements and claims about a Reverse Mortgage Rancho Cordova, California |
| 6th of Jul, 2011 by User910081 |
| My wife and I applied for a Reverse Mortgage with Genworth Financial and were told up front that based on an in house comparison of homes in our area we would be able to dray in excess of 46 thousand dollars out of our equity. We agreed up front to pay $450.00 for a home appraisal and were assured by both Michelle Gilson and Jeramias Smith that was all we would have to pay. An appraiser showed up and all the time he was on our property he was putting manufactured homes down. Our home had appraised for $170,000.00 less than one year prior, and we had spent more than $30,000.00 on improvements to the home and property. His estimate came up $22,000.00 below the previous appraisal and our lot was appraised at $15,000.00 and lots in our area are currently selling for more than $39,000.00 without any services on them. He also valued our detached 1200 square foot garage/shop at $16,000.00 that was valued at 27 to 31 thousand only a year earlier when we built it, at this time an estimate to build the same building is above $35,000.00. I contested this appraisal and Michelle Gilson came up with all sorts of reasons why they could do nothing about it, and did nothing. Just the discrepancies in the lot and shop building was enough to take the appraisal over the previous 170 thousand dollar mark. As the loan process progressed Michelle Gilson kept adding things that we needed to get the mortgage, and would not send us information we requested both on the phone and via e mail. At a late stage in the process she said we had to get an engineers report on our homes foundation. I questioned this and she said it was the LAW that they get this. I asked for a copy of the LAW and never got it. I also asked for an update of exactly how much we would be able to draw from our equity. I never received that either. Michelle Gilson did call and state we would only be able to dray around $15,000.00 from our equity because of the appraisal. I told her to cancel the loan process at that time because that was not acceptable. Jeramias Smith then called and said the engineers report was a requirement placed on the lenders and we would not have to pay for it. He also said he had refigured our loan and we would be able to draw in excess of $22,000.00 from our equity. I told him we could live with that and they could continue the loan process. Then a Notary Public was sent to our house for us to sign the Reverse Mortgage papers and when I looked at the closing document that concerned the money figures, it indicated we would only draw just in excess of $16,000.00 from our equity. I called Jeramias Smith and placed him on my speaker so my wife and the Notary could both hear what he had to say. He told me to sign the papers and he would redo the figures later, and stated the draw would be around what was stated on the paperwork. I told him to cancel the loan process because we would not sign papers without the right numbers on them. He became VERY IRATE and started yelling at me over the phone and basically ordered us to sign the papers as they were. I finally cut him off and told him to cancel the loan. We recently received a bill from Michelle Gilson at Genworth Financial for $525.00 for the appraisal, I sent them the agreed upon $450.00. We also received a bill from a Company called OnTheLevel Contractors also in California for $550.00 for the engineers report on our foundation. I sent them a certified letter and told them to send that bill to whomever ordered and received their services because we did not order it, receive it, or authorize anyone else to obligate us for any services. I think the entire process is a scam against older people and we were treated like we were total idiots and did not know or have any say in what we did. We were just supposed to sign what they told us to, and accept whatever they offered. Thank you. |
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I'm sorry to hear you had such a bad time with the reverse mortgage. I'd like to clarify some things for you.
An appraisal is the appraiser's opinion of value on the day the property is seen by the appraiser. What anyone's value was last year is no longer applicable today. Appraisals are based on the sale value of similar properties in your immediate area. While you may have spent $30, 000 on improvements, the improvements may not have added any value to your property. Appraisers will add value for things like room additions, added garages, bathrooms, a new roof. New wallpaper or paint could change how your home looks, but is unlikely to add much value. Right now when the market is depressed, your home is being compared to everything that has sold or has been foreclosed on in the recent past. Foreclosures are driving everyone's values down.
Michele Gelson or her boss might have been able to challenge the appraisal if they would have been able to show proof of higher value that the appraiser might have accidentally overlooked. This might happen in a situation where a property has sold and the sale had not been recorded at the time the appraisal was done. What she may have tried to indicate to you is that the appraisal was based on fair and recent comps and therefore she could not challenge the value.
It is not unusual for lenders to ask for additional items during the lending process. It's annoying, but it's their money. It's their due diligence. I don't know of any loan officers these days who have not had "conditions" added to their loan files during the escrow process. The reason is simple. There's a lot of mortgage loan fraud going on out there. The lenders want to make sure they are lending on a viable property. They expect us not to take it personally, but often even those of us who are directly involved in your loan process wonder why the heck they don't ask for all this stuff up front.
Manufactured homes built and certified (tagged) after 1976 must be on owned property and must be fixed to a permanent foundation in order to qualify. You should have been told that when the loan officer came out to take your application. You should also have been advised that the foundation had to be certified by a structural engineer and that there was an additional cost for that.
$450 is not an out of the ordinary fee to pay for an appraisal. The actual cost of the appraisal is determined when the appraisal is ordered by the Home Valuation Company, not the loan officer. The $450 is a "guestimate" of the charge. If it is less than that a rebate is issued to you at the closing table. If it is more than that, the balance of the fee is deducted from your reverse mortgage settlement. Should you choose not to go forward with the loan you are still responsible to pay that fee. There would have been a disclosure in your loan application papers stating as much.
I've never known a lender to go after someone for the reimbursement of those fees, however, I have known them to refuse to take another application before those fees are paid for. I suspect when those fees are not paid by the borrower they are written off as a "bad debt" to the corporation.
The situation you described at the closing table is outrageous. You should never sign anything you don't understand, or that states something other than what you had agreed to. You have a right to see your closing documents prior to signing, you also have a right of rescission--you must notify the lender in writing within 72 hours that you are backing out of the loan. Generally, there may be very minor differences in the final settlement statement, but a $6, 000 difference really is intolerable.
Reverse mortgages are not a scam on seniors. I know many seniors who have been able to stay in their homes when they would have lost them otherwise. Lately, lots of seniors are turning to a reverse mortgage to be able to stop a foreclosure. They are insured by the government and have heavy oversight by both the government, and third party credit counselors. You can't even apply for a reverse mortgage without speaking to a third party credit counselor who reviews any documents you've been given by the loan officer, or recalculates the numbers based on what you tell them. If you told them your place was worth $300, 000, that's the number that they use to calculate your potential benefit. If the appraisal comes in later at $175, 000, the calculations are all re-done using the appraised value of $175, 000.
Reverse mortgages are an excellent option for many seniors who need liquidity and who want to age in place and are physically able to do so. They can even be used to purchase a home in cases where a senior would like to move to a safer or more convenient area, to downsize and have less maintenance costs, or to fund a retirement, move closer to their kids. It's been used to settle divorces, too. They aren't for every senior, though, and only a reverse mortgage consultant who knows these products well can really explain them well enough for you to see the potential in one as it specifically relates to each borrower.
Again, I'm sorry there was so much misunderstanding regarding what would be required, how the appraisal works, and that the closing documents did not reflect the correct numbers. Had I been the loan officer I would have requested a closing statement the day before to be sure the numbers were what they should have been, I would have gone over those numbers with you to be sure we were on the same page. On discovering a $6, 000 disparity I would have called off the closing until the correct numbers were in place.
Colette A Gray
www.ColetteAGray.com
[email protected] |
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