Your AARP The Law
By Robin Gerber
The issue: Can a reverse
mortgage payment be
garnished to pay a court-ordered judgment?
Roy B. Ewing, a New Jer- sey pensioner in his early 80s, drove his car into the
wrong lane of trafc and hit Charles
Cameron, who was riding a bicycle.
Cameron, in his 60s, sufered severe
injuries, including brain trauma. He
returned to the prep school where
he taught, but his injuries forced him
to take early retirement.
Ewing did not have auto insurance.
In 2009, he agreed to a judgment of
$400,000 and said he would make
monthly payments to Cameron.
Two months before settling the
case, Ewing had obtained a reverse
mortgage. Wells Fargo Bank took
out a $360,000 mortgage on his Lambertville, N.J., home and
agreed to pay him
$959.01 per month
for life. His only
other income came
from Social Security
and a modest public
Under the mortgage
rules, Ewing agreed
to live in the house
and maintain it. He
did not have to repay the money. The
bank could recover
its money only by
selling the house. He
had not yet made any
payments to Cameron.
Then Cameron and
his wife, Christine, discovered Ewing’s reverse mortgage and demanded the payments from Wells Fargo or
Both Wells Fargo and Ewing re-
fused to send any money. They ar-
gued that the payments under the
reverse mortgage were a loan from
Wells Fargo—not income—and
the Camerons had no claim to it.
What it means to you: Anne
McHugh, an attorney for the Camerons, cautions homeowners to
be “hyper-vigilant” if they get a
reverse mortgage. Consult with a
financial adviser, attorney or accountant. Be aware that a reverse
mortgage may not shield your
home equity from creditors, despite what a bank might tell you. ;
Robin Gerber is based in Maryland.
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