Community Rallies To Save Seniors Home With Reverse Mortgage

image The Daily Times writes that the home of 72 year old Lorraine Zickefoose is scheduled to go up for auction because she fell behind on her payments with Wells Fargo Home Loans.  Hoping to save her home, she applied for a reverse mortgage with John Smaldone’s AAXA Mortgage and was approved but due to falling property values the she is about $38,000 short according to Smaldone.

"Lorraine is going on 72 years of age, she is a widow and is handicapped," Smaldone said. "She has nowhere to go, she may be put out in the streets."  A local church group and other concerned citizens are rallying in a last minute attempt to stop foreclosure on the woman’s home. 

Smaldone told RMD that he has been trying to negotiate a settlement with Wells Fargo in the amount of entitlement that Zickefoose would receive from the reverse mortgage but the company turned it down and asked its attorneys to proceed with foreclosure.


image"We are still trying to stop the proceedings," Smaldone said Tuesday. He has written letters seeking help from U.S. Rep. John Duncan and Sheriff James L. Berrong.

According to an email from Smaldone, the woman’s home was appraised $170,000 and when the lender ran its own appraisal it came back with $139,000. 

I know that are tons of Wells Fargo people that read RMD, if you think you can help please let me know.

Groups racing to save Alcoa woman’s home

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  • I have seen this happen to so many Senior homeowners. The sad part about it is that at one point she probably qualified for a Reverse Mortgage and didn’t take it because she didn’t understand it.

    I personally have had 3 clients that I forwarned them about property values declining and how they are going to run out of there savings and they still thought they would be ok. In there words,”The Lord or Obama will help me before I lose my home.” I am not a man of faith. However, I do believe that the God will help those that are willing to help themselves!

    All three clients are in forclosure now and trying to do loan mods. They are not having much success because they still have some equity in there homes. My guess is that the banks will forclose to offset some of there losses that they have w/ the homes that are upside down in value.

    Again, everyone it is up to us to get the word out about Reverse Mortgages. I said this before but we all need to take a stance to lead this industry. Reverse Mortgages are still considered to be very taboo and there are lot’s of misconceptions.

    I have only had 3 clients that chose to be stubborn about this. The reality is that this is happening to thousands of Senior homeowners.

    I have had the most success w/ being totally blunt and frank w/ these Seniors as they need to understand there reality. Don’t be afraid to alert there children or gatekeepers about what’s going on w/ them. This is very important and these folks need to be helped!

    For more advice please email me!

  • Let’s think reasonably about this…Nobody wants to see a widow foreclose on her home, but if WF helped her, how many other widows would demand the same? Let’s just hope her family and church members can come up with enough to help her.

  • First, it would be more cost effective for Wells Fargo to lower the payoff and let her stay than it would be to foreclose.(The house could loose that much value before they get it back on the market and that doesn’t count the cost to get it ready to sell)

    Second, they could make more money by being the good guy in this and allowing the media to run with this and show Wells Fargo as the company with heart, than to forclose.(you couldn’t pay enough for that kind of advertising)

    MK- It would be better for Wells Fargo to help as many widows that they can…it would pay them with customers for life, Them, their family, their friends and all of their neighbors, and so on and so on!!

    Someone at WFC needs to start thinking about their business….

  • I know tons of WF people read RMD so I’m hoping one of them might be able to help.

    We had a situation like this with Countrywide about a year ago and one of their execs read it and reached out to me and the originator and we got it done.

    Sometimes the right people just need to hear whats going on and we can make good things happen.

  • WF folks won’t reply because they know better but like every other article that misses the line between fiction and ethics, who is to say that WF’s forward side has no idea that their reverse side could help. I would bet that an accomplished WF rep could step right in and put things in motion. I know its happened here on the east coast with WF and Wachovia in more than one instance because they are better trained.

  • Critic….you and your bobble bobble laws…we all know that lender stack on tons of “legit” fees and charges when a home goes into foreclosure….that is obviously what Mehran is referring to. I honestly cannot believe you close any loans, because you spend way too much time nit picking on this site.

  • Yes ReverseManiac is right. The Critic spends too much time on this site. …must comment and do research on everything. Please Critic go sell something and leave the readers of RMD alone. If you could cut your comments down by just 80%, we’d all be happier!

    Maybe other RMD readers could make comments and suggestions without being attacked by you and CPA James Veale. John Y of RMD – do you agree? (I hope so). Maybe more people would use their real names again too.

    Our current administration is bragging about how we are helping people stay in their homes and keep them out of forclosure.
    Last month I had a 76 year old client that was $3,000 short to qualify to pay off BB&T Bank and stay out of forclosure.
    I called the bank to see if they could forgive the $3,000 and pay off their loan.
    Without hesitation “Thats a Fannie loan they will not do anythig.” I asked if they would rather see a 76 year old homeless.” We will go to forclosure and get all of out money.
    Government in business does not work.
    Our company,the appraiser,and attorney for title all gave up our fees and some donations and got the clients
    loan paid off.
    No help from the big banks that we have given billions of taxpayer dollars to.

  • During a down news cycle, if and when the media decides to make stories like this public, it will be very interesting to see how WF and others handle the senior borrower who is faced with losing their home due to loan circumstances. I see it time and time again, the good small companies and individuals eating profit to HELP a borrower in need, but have yet to hear a feel good story from a big bank giving up any of their profit!

  • I did fail to give credit where credit was due.
    CITI financial a loan company, jumped at the chance to reduce their second mortgage balance. No hesitation.
    Thanks CITI Financial.


    Considering bankers make their living counting money, you would think they could figure out how to truly mitigate losses. When a senior (or anybody) goes through the foreclosure process, it costs the bank an average of $50,000 in expenses to complete the process.

    Most of the time when they end up selling another vacant foreclosure that has been vandalized and stripped of the pluming etc. it is sold far below what the appraised value would have been if we had done a RM and the net proceeds to the bank could have been more than what they ultimately receive after expenses, liabilities and another foreclosure sale that brings down values.

    All I would ask forhere, is a little bit of COMPETENCE. If not concerned about the ethics and morality of keeping Seniors in their home – look at the bottom line for the bank!

    I have negotiated with about 15 different banks and YTD saved 22 seniors using the RM and the bank accepting a short pay-off. However, I have lost about the same number (some not totally resolved yet). I am personally deep into this issue – and I can tell you that WE DO HAVE A WIN-WIN SOLUTION for a large number of these cases, but the biggest problem is getting to the level of competence in the bank to make this happen.

    Finally, the comment about Fannie and Freddie not allowing short pay-offs is especially true at Freddie (as well as the VA). I think Obama gives nice speaches, but watch what actually happens. My success at negotiating these has come primarly with sub-prime lenders – the “big boys” are out to lunch.

  • Critic, Cynic and Mr. Veale, although a little strident and nit picky, provide a valuable service, I think, on forums like this. Without them, outlandish, inaccurate and self serving posts would sometimes go unchallenged. Most often they clarify and focus issues that most of us are too lazy to explore.
    Financial products are often complex and can be misused and abused, but most times are valuable tools for individuals. I don’t sell RMs, but I think it is a wonderful tool in some circumstances. It is too bad the big guys don’t have a department (they have every other department, and some a very big greed department) to find ways to help people (put it right next to the PR dept.)like the above examples. Fidelity once said that 17% of their business came from PR. (C, C, and V feel free to correct my % if it is wrong, I welcome informational corrections.) Last bromide: keep it light.

  • John- I really admire what you are trying to do to help Lorraine. It’s nice to be reminded why we all decided to join this industry; to help seniors. If you need any assistance with the title and settlement side, I would more than happy to help.

  • The bankruptcy bill that was defeated in the senate would have solved this problem. But the banks, mortgage brokers, real estate brokers, apprasiers spent $11million dollars to defeat this bill. see link to video Visit this site for video by Senator Dick Durbin the bills sponser.

    The bank is going to lose more than $38 in foreclosure.
    I also suggest you put your banks name in front of “mortgage fraud” and Google it. then you will know why they spent $11 million to defeat this bill.

  • Does it say anywhere in here how much she owes? Lowering the rate can help quite a bit. Just because she is short 39k with a broker doesn’t mean that she is short 39k with all brokers or lenders. Someone please let me know how much she owes.

  • Hey all you WF guys out there. Did you read John’s blog? I hope some of you write him with advise to help this poor lady.

    I agree with dduck. Good PR should be high on the agenda of bankers. This particular case makes WF look like Simon La Greed twirling a mustache.

    Hey guys! Can we focus, please. With all you big producers, you must have helped people like this lady. If you have other people like this one, where have you found help?

  • I don’t understand why Wells doesn’t write off the difference if she does her RM with them. (Sorry to AAXA Mortgage, but really.)

    I had a client with a WF loan that had a pre-payment penalty of about $7000, which they waived if she did her RM with them. I advised her to do so.

  • I was wondering the same thing, RM Originator. If I was Mr. Smaldone I would speak with wells regarding the possibility of doing an in-house refi into a HECM. It’s unfortunate to lose the deal after all the hard work, but I am sure you just want what’s best for the client.

    I also want to comment on RMGOD’s comment. Also right, a 5.56% fixed rate may be the cure. Probably not, but it will improve her position. $25 servicing can also help a few thousand. Maybe you can reduce the required write-off from 30 something to 10-20 something. I take it all this has been taken into account? If not, please do. We offer that scenario as do other lenders.

  • Good evening,

    Just wanted everyone to know that we received from the Attorney’s handling the foreclosure on Lorraine Zickefoos’s home, a stay of execution. We were able to get the date of the home to be sold on the block moved from May 26th until June 26th. I will win this battle, the war down the road may be a tough one.


    John A. Smaldone

  • Good morning,

    To all those that have given me support on what I hope to accomplish for Lorraine Zickefoose, thank you.

    Cynic, Alissa and Critic, I appreciate your comments and offer to help as usual, I just may call on you. KidReverse, I have done everything possible with Wells Fargo, they speak with fork tongue.

    I don’t care about losing the deal, all I care about is this woman remaining in the home she has lived in for 32 years. We are going to forfeit any origination fee in order to get the most out of the Reverse Mortgage.

    I just got a payoff from Wells Faro’s Attorney’s yesterday, we are now $42,563.00 short. They continue to ad the accrued interest, late charges and you name it. I am starting my negotiation process again with WF. I am requesting of them to cooperate with us, give me the lowest payoff they can live with so we no exactly what we need to raise.

    We have the news media that will be doing a thermometer count down daily along with the TV stations. I explained this to WF and their Attorney’s, you think they would be a bit sensitive? Absolutely not, they never returned my E-Mail’s. I am sure getting out of the office to enjoy the long weekend was more important than a 72 year old handicapped widow. I will press on Tuesday with both of them.

    If anyone can help me, they can call Wells Fargo and tell them they need to help us and cooperate with us. Her name is Lorraine Zickefoose, 1780 Ramsay Street Alcoa, TN 37701.

    I have taken it upon myself to set up a closing for June 19th in hopes we can raise the funds needed. If Wells Fargo could help and do their fare share, we will be able to achieve our mission. We feel very good about raising at least $28,000. We are getting out of the Reverse Mortgage $92,419. WF’s new payoff was $135,563.00.

    When I started negotiating with WF in December we were dealing with a payoff of $126,897.00. Some one said in one of the comments, “If we help one widow out we would have to do it for all of them”

    I say this to that comment. If we as an industry can help one widow retain her home and if all can see what it took to save her from being put out in the streets, Then, just maybe the right people will open their eyes and ears and realize somrthing must change. All the so called money appropriated for foreclosures, sure do not help Lorraine Zickefoose.

    I want to thank you all again, any help you can render to me with Wells Fargo will be appreciated in a way you can never measure by words. Have a safe Holliday weekend. I am heading out to the Fund raising car wash for Lorraine.

    My best,

    John A. Smaldone

    John/Everyone Else: Going after marketing and sales people could help a lot in this case and others. Attorneys are, well attorneys, and they respond more to internal pressure. If the higher ups are marketing/sales people you stand a better chance of changing things than a frontal assault on attorneys (they are trained to defend, no matter what, when in an adversarial position).

  • John,
    I admire all the work you are doing to help this woman out. Have you submitted press releases to the local media, this would be a great interest story and may get some help. Also, have you talked with a foreclosure counselor? I have found them helpful in getting short payoffs (some are better than others so keep calling around).

    And if all else fails before the sheriff’s sale, something to think about is buying the home back after the sale. I recall an article about a woman in Georgia that was able to buy her home back after the sheriff’s sale because they lowered the sale value so much.

    Keep up the good work!

  • RMleader,

    I appreciate your support.Yes I have issued press releases. I have the local newspapers behind this as well as three TV sations. I have also had a release that mentioned Ms. Zickefoose by The Associated Press.

    I have not gone to a forclosure counselor, I have been doing all the negotiating with Wells Faro myself.

    Your latter sugestion is something to think about. I am fearful her health would not hold up. I ntend next week to start pressing WF to bring the Payoff balance down to where it would only equall the pricipal or lower. I WF would cooperate and even lower the balance by $15,000 to $17,000, we could make it work.

  • RMleader,

    I appreciate your support. Yes I have issued press releases. I have the local newspapers behind this as well as three TV stations. I have also had a release that mentioned Ms. Zickefoose by The Associated Press.

    I have not gone to a foreclosure counselor, I have been doing all the negotiating with Wells Faro myself.

    Your latter suggestion is something to think about. I am fearful her health would not hold up. I intend next week to start pressing WF to bring the Payoff balance down to where it would only equal the principal or lower. If WF would cooperate and even lower the balance by $15,000 to $17,000, we could make it work. Next week, I hope to get some answers to my E-Mail’s I sent to Wells and their Attorney’s, we will see what the scoop will be. Again, I appreciate your suggestions and support.

    Bet Regards,

    John A. Smaldone

  • Critic,

    Thanks for your reply. I will answer your questions, they are good questions and need to be answered. I hope the admin reads this as well.

    First off, WF is now the servicer of record. They sold the loan in a pool, which I believe it was to City Corp.

    Second question of yours, or statement has to do with why wouldn’t the investor except a short Payoff. Good question, I have worked with WF since December, offered various proposals including a subordinted position on the short fall portion, all to no avail. The investor did an interior appraisal, came in with $139,000. Our appraisal came in at $170,000. Our RM at the time had a net available of approximately $102,500.

    This is what was offered to WF. We were ready to close the loan if they excepted. My offer was submitted to WF in February, it took that long to get to the right people to talk to.

    After I submitted all the paper work that was needed for a transaction like this, They finally came back to me. Mind you, I submitted all docs in the middle of February, they finally came back to me with a denial in April. During the time I submitted my paper work up to the time I received the denial, I E-Mailed them at least twice a week. I could never get a phone number for the negotiator assigned to me, a Rick Tills with WF.

    WF was offering Lorraine alternatives, all were unacceptable. The alternatives were, do a short sale on the property or a deed in lieu of foreclosure. This women has no where to go to call home if she is foreclosed on.

    What really puts the Frosting on the Cake is that on Saturday, yesterday, the day of the benefit car wash for Ms. Zickefoose an article hit the front page of the Times. The article was a follow up to announce the car wash, it also had comments from WF defending their position against my statements about the ordeal with WF. They had the audacity to come out and say that WF had many alternatives for Ms. Zickefoose. They went on further to say that they had many loan modification programs they could put her into.

    Critic, let me tell you this. Number one, Ms. Zickefoose can not afford monthly mortgage payments, not enough to satisfy WF and the investor that bought the loan from WF. They asked Ms. Zickefoose to submit, budgets, proof of income, hardship letter’s and even character references. They came back with what I knew they would come back with, sorry Ms. Zickefoose, you do not qualify for a loan modification.

    The problem we face in the Reverse Mortgage industry is their are no funds from all these so called stimulus packages, especially none to help the Zickefoos’s of the world. There are so many seniors around the country in the same position that Lorraine Zickefoose is in. Critic, the so called funds appropriated from the various bills passed, such as the $75 Billion Affordable Housing Bill, does not have any provision to subsidize seniors like Lorraine. In short, she can’t afford or qualify for a loan modification program nor is their any provision in any of the bills to help her out. I come up with funds from a Reverse Mortgage that could have settle the loan immediately. The lender says, not enough money. They don’t care about Lorraine Zickefoose. They may have you believe that when you watch the nightly news, but in reality, it is one big smoke screen. They just don’t care, simple as that!

    Now if the proper program was in place to have funds appropriated for seniors in the position that Lorraine Zickefoose is in, funds to subsidize a portion of the shortfall. Lorraine would be in her home with piece of mind. However, we do not have a program like this. If the shortfall was shared by both the lender and a Federal appropriation bill fund, this would be a real program you can put your teeth into. I don’t know if our legislators would understand a bill with comment sense and simplicity built into it. I hope I answered your questions to your satisfaction. I saw in a comment on an issue some one said you go on and on with your comments, looks like you and I have a lot in common. Thank you Critic, have a good weekend.

    My best,

    John A. Smaldone

  • John,

    In my experience, it isn’t until AFTER the Sheriff’s Sale that the lender will take a short pay-off. It seems that either their hands are tied prior to that. Or they really don’t believe the person will not make their payments until the sale occurs. Either way, the redemption period is the best time to get a short-payoff. I know this is true in Michigan, can’t speak with the same confidence for all the states.

    I have also found it helpful to provide a list of the comparative FORECLOSED sales in the area. Many of these homes are vandalized after they are vacated – with all copper and anything of value ripped out. So the true comparable sales price for you case is really NOT $139,000 – but what it will be once it is a vacant and foreclosed home.

  • Patrick,

    Thanks for your comment. I will take this into consideration. Actually, Wells Fargo came in at $135,000, I will stick with that.

    I received a call from WF, they assigned a new person to me, they seem to be willing to work with me. I will let everyone know in the next couple of days the out come. Thanks again Patrick, I appreciate it.

    John A. Smaldone

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