Charleston, South Carolina
I began to toy with the idea
of a reverse mortgage as I
studied the history of my
declining stock investments.
While you are reading this, I will be in Oxford,
England, thanks to my reverse mortgage.
I began to toy with the idea of a reverse
mortgage as I studied the history of my
declining stock investments.
Today, my investments are valued at only a third of what they
were worth under the Clinton administration. My stockbroker
and my CPA think I may live to be 100 years old and they want
to parcel out my assets over the next 20 years.
As far as I know, my health is good and I want to keep on
dancing the Charleston and traveling this fascinating world as
long as I can.
The first step in obtaining a reverse mortgage is to choose a real
estate attorney with whom you have complete trust. I chose Ted
Hostetter. He told me to call Paul Franklin, a reverse mortgage
specialist with Franklin Funding.
Paul told me that the first step was for me to go for mortgage
counseling. This is required by the federal legislation that
guarantees these loans.
I thought to myself, “This is going to be kind of fun, me, an
80-year-old attorney going for mortgage guidance!”
The counselor was approved by HUD. He told me the history
of these kinds of mortgages, explained to me, among other
things, that this kind of mortgage is designed for those senior
citizens who have their major asset in their home and would like
to have cash when they need it.
The federal government guarantees these mortgages, which
makes them very desirable to a lender. He gave me a certificate
that showed I had graduated from counseling.
The second step was for me to have my house appraised, and I
was given a list of Fannie Mae-approved appraisers.
The principal limit came back in excess of $600,000, the
maximum for any of these mortgages. If the appraiser had
recommended certain improvements to my house, the mortgagee
would withhold the funds to pay for the improvements.
The next step was to meet with Paul, give him my counseling
graduation certificate, sign the many pages he had prepared for
my application to FHA, requesting that it permit me to be on
Paul assured me that it was his best judgment that I would
I began to surf the Web for summer school programs at that
great Oxford University in England.
I knew that E.K. “Booper” Pritchard of the Charleston Bar
was spending the first week in July at Oxford taking a course
“Oh, it is enjoyable,” Booper said. “We sit around on couches and
daily receive two one-hour lectures, with no tests, no exams.”
It wasn’t very long before Paul called me to set a time for closing,
and he asked how much money I wanted in my first draw. I told
him I’d take $20,000.
The mortgagee would give me a line of credit for $430,000. I
could have requested monthly payments.
Paul had placed my application for a loan with the Generation
Mortgage Company of Atlanta. Closing costs could be paid out
of my line of credit.
The note says this obligation is to be paid off Dec. 16, 2078,
when I will be 150 years old, or within a year after my death,
whichever comes first.
My estate will pay an interest rate of 5 percent, which can go up
or down two points per year.
The closing was held at Ted’s office and he had prepared all
With this line of credit, I could pay for home health care, put in
an elevator if necessary, and fly to London to study at Oxford!
— Ruth Cupp
Editor’s note: Cupp began practicing law in 1954. She served in
the S.C. House of Representatives and was an associate judge in the
Charleston County Probate Court.
Reprinted with permission of South Carolina Lawyer’s Weekly