Hi everyone:

A friend of mine is a fellow with a real heart for older folks. He took care of an elderly neighbor for many years because she had no family. It came as a real shock when, following her death, her lawyer informed him that the woman had left everything to him. This included a small bank account and her house, which was in dire need of repair.

He is a contractor by trade, so he immediately set to work to get it ready to sell. He was not prepared for the next shock: she had gotten a reverse mortgage several years prior to her death. She had been living on the money from the mortgage and had left him a house whose equity was almost totally eaten up by the mortgage.

By the time everything was over, he barely made enough money to pay for the expenses he had incurred while fixing up the house. It was only the search by the title company that revealed that there was a mortgage on the property; she had no paperwork in the house that indicated it was anything but paid for and he assumed that it was free and clear of encumbrances.

Make sure that you check things out before you sink money into a project. Otherwise, you may end up like my friend: seriously deluged with out-of-pocket expenses and now nothing to show for it.

Best,

Dr. Sheri