Financial decisions can have consequences that outlive the people who make them.
In the case of three women, two in South Philadelphia and one in Delaware County, the decision to take out a reverse mortgage - a special kind of loan that allows borrowers 62 and older to convert a portion of their home's equity into cash - has made their lives a nightmare.
All three were younger than their spouses and not yet 62, which meant they did not qualify for these mortgages and could not be co-borrowers. Their names were removed from the deeds so their husbands could qualify.
Once their husbands died, and, in some cases, even with their names back on the deeds, they faced foreclosure because the law allowed lenders that option.
Ruth Guerriero of South Philadelphia remembers the day she got the letter that "scared me to death" - the one threatening to foreclose because of a reverse mortgage she didn't know existed.
She was sifting through the day's mail at her dining room table in one of those postage-stamp-sized brick ranchers you can see from I-95. It had been 17 months since her husband, Alfred "Big Al" Guerriero, died at age 89, and she was still getting Mass cards from friends.
But this piece of mail in early October 2013 was from OneWest Bank, informing her that it was foreclosing on the house in the 2800 block of South Hutchinson Street that the couple had bought in 2006 for $200,000. Without her knowledge, Guerriero said, her husband - 23 years her senior - had taken out a reverse mortgage in September 2007.
To clear the way for the mortgage but without telling her the real reason, her husband asked her to remove her name from the deed, Guerriero said.
"He said if I did, our property taxes would be less since he was older."
Because her name was neither on the title nor listed as a co-borrower on the reverse mortgage, OneWest insisted that Guerriero, now 69, had no claim to the house after his death.
Her lawyer, Michael Froehlich of Community Legal Services, argues that she does, indeed, have a claim.
Foreclosure proceedings reset to July 7 in Common Pleas Court have been postponed because of changes in U.S. Department of Housing and Urban Development rules affecting surviving non-borrowing spouses that may allow Guerriero to remain in the house as long as she meets the obligations required of any borrower: maintaining it and paying homeowners' insurance and taxes, to name a few, Froehlich said.
As a result of a prolonged challenge by the AARP Litigation Foundation, HUD no longer requires a lender to foreclose on an eligible non-borrowing spouse to satisfy the borrowing spouse's reverse-mortgage obligation, said Julie Nepveu, a senior attorney involved in the case.
The program requires lenders to foreclose on the property or permits them to sell the property or take a deed in lieu of foreclosure upon the death of the last surviving borrower, despite statutory language requiring HUD to implement a program that protects homeowners, including the spouse, Nepveu said.
"The litigation resulted in the court invalidating the regulation that fails to protect the non-borrowing spouse. That is why HUD had to put foreclosures on hold for about a year while they considered what the new rule would be," she said.
Bruce M. Sattin, a lawyer with Szaferman, Lakind, Blumstein & Blader in Lawrenceville, also noted that if there is a much younger spouse on the title, "it greatly reduces the principal amount of the reverse mortgage that can be approved, reducing both the attractiveness of the product to the homeowner and the commission the [mortgage] broker can earn."
Last month, HUD announced that, if the lenders agree to let the survivors stay in their homes, it will take over the loans and, in return, accept lenders' claims for the mortgage insurance on the properties.
HUD does not break out, from the data that lenders provide, the number of non-borrowing homeowners affected by reverse-mortgage issues. AARP estimates the total number of reverse mortgages nationwide at 625,000 to 650,000.
"This ruling effectively removes the incentive for lenders to foreclose on these homes," Nepveu said, adding that she expected most to agree to take the HUD offer because "what lender wants that kind of word to get out about them."
Froehlich has written to OneWest to allow Guerriero to stay in the house, which she says is likely not worth what she and her husband paid for it at the housing boom's peak.
They await a response from OneWest, which, like other lenders, does not share mortgage details with noncustomers.
Some reverse-mortgage borrowers think they cannot lose their houses through foreclosure. But data from Clarifi Inc., the financial education and counseling agency, show an increasing number in Philadelphia - from 29 in 2009 to 293 in 2014, and not just for surviving spouses.
Helena Salera's husband, Louis, was 13 years her senior. He had open-heart surgery in 1999, and his health continued to decline. She was a beauty-school supervisor until she was hurt and went on workers' compensation.
By 2009, "our income had become less and less," so the couple sent for reverse-mortgage information, and, eventually, met with a broker.
"Because I wasn't 62, I couldn't be a co-borrower and had to take my name off the deed so he could get the loan," Salera said.
When she asked what would happen if her husband died after she turned 62, she said she was told that "all I had to do was put my name back on the deed and nothing would happen."
The statement was not true, said Peter Schneider, her Community Legal Services lawyer.
Salera had her name restored to the deed, and removed and restored it two more times after the couple refinanced the loan twice in response to mail offers.
Her husband died July 7, 2014, of bladder cancer, after "promising that he would hang in until after I turned 62, and he did," she said. A week after his funeral, "I got a call from the lender saying I had no right to the house and I'd have to sell it and leave."
She was now old enough for a reverse mortgage, but she learned the equity had been tapped out.
What the original broker had told her about being safe as long as she was 62 when her husband died and returning her name to the deed "was contradicted by the fine print" in the written document, Schneider said.
Salera's eight-bedroom house in the 600 block of Wharton Street is in an area of rising prices, and she acknowledged that she could do well if she sold.
"I've lived there for 40 years, since we got married, and I don't want to go," she said. Schneider has submitted paperwork for reassignment of her loan to HUD.
Mark Reilly, of Oak Mortgage in Trevose, said too many people seek reverse mortgages for the wrong reasons.
"One woman wanted one to buy a blue Cadillac," Reilly recalled, and he said, "No."
"They have to be aware of the ramifications," he said, especially the expensive closing costs, which, though financed as added debt against the property, can be as high as $9,000 on a $200,000 mortgage.
Borrowers also need to be responsible with the cash they receive by converting home equity, Reilly said.
"If you have only had $200 at any one time in your life, $100,000 looks really good," he said, but the money has to last a long time. "How are you going to meet your property taxes and maintain the house for the rest of your life?"
HUD has just added a financial assessment for borrowers that accounts for monthly expenses and life expectancy, he said. There is also a 60 percent limit on the total amount available in the first year of a reverse mortgage, "to give you a chance to think," Reilly said.
Hoping for help
Terry Hardin and her husband, Charles, moved back to her childhood home in Crum Lynne from Florida after the couple's son, Kevin, an Army medic, was 100 percent disabled when he was wounded in Iraq in 2007 and her father died.
Hardin, now 58, took her name off the deed to the Delaware County house so Charles, a Vietnam veteran, could obtain a reverse mortgage from Genworth Financial in 2009.
In 2010, Charles, then 64, was diagnosed with colon cancer. He died in September 2012, eight months after Kevin died of his battle injuries.
Hardin worked with Clarifi to get her financial house in order, hoping to qualify for a loan to pay off the reverse mortgage. In 2014, however, the lender moved to foreclose.
Proceedings were halted through Clarifi's efforts, said her counselor, Chelsea Barrish, who said Hardin was meeting with another counselor to discuss her options.
HUD's June 12 ruling may be a solution for her, though Genworth Financial rescinded an offer to follow this route earlier this year because of a prior HUD ruling.
"It's my childhood home," Hardin said. "I don't want to lose it."