Violet Mae Richardson’s Fight to Reclaim Her Ancestral Home

In 1948, the Pleasantville neighborhood was established to help form a community for marginalized groups dealing with housing discrimination at the time—namely middle income African Americans, including veterans and their families. This community became the permanent homestead for many African Americans, who could not legally own homes in most other areas at the time. Unfortunately, the neighborhood has been targeted by numerous property taking scams that have displaced and continue to displace legacy homeowners from their homes and cause homelessness. The effects of these threaten to erase the historical significance, hope, and value that this neighborhood was created for.

Violet Mae Richardson’s family was one of many original residents in Pleasantville. In 2006, her parents took out a reverse mortgage. As the name suggests, a reverse mortgage is when a homeowner borrows money, using their homes as security. Instead of making a monthly payment, a borrower’s loan must be repaid by the time they move out or pass away. If the loan is not paid off, the home is foreclosed on. Many who enter into the contract for a reverse mortgage do not understand the legal consequences of the transaction.

A month after the reverse mortgage was signed, Ms. Richardson’s father passed away. In 2018, the lender filed for foreclosure, alleging failure to pay taxes and maintain home insurance—two primary stipulations of a reverse mortgage—that results in a foreclosable default of the reverse mortgage if the borrower does not keep in good standing while the reverse mortgage is outstanding. While the suit was pending, Ms. Richardson’s mother signed a deed transferring the property to her. By 2020, the Court had conditionally granted the Richardson family’s house to be sold after the COVID-19 disaster declaration was over. Like many of the original families in the neighborhood, they were being pushed out by the confusing and predatory nature of reverse mortgages.

Amidst this arduous trial, Ms. Richardson also lost her mother and became an heir to her mother’s estate. She did not receive any documentation from the lender concerning her rights, and was not even informed that her house was being sold while she was still occupying it. Ms. Richardson felt the lender’s evasiveness had prevented her from exercising her rights, so she consulted LSLA to contest her eviction.

Her case was assigned to Melinda Lopez in our Housing and Consumer Unit. Melinda filed an answer in her eviction suit, but also discovered that Ms. Richardson’s rights had been violated.

Generally, the borrower’s estate, heirs, or other party with legal title to the property have the option to repay a reverse mortgage and keep the property. This can usually be done by paying off the loan balance, which includes the loan amount, accrued interest, and any fees. The borrower’s estate, heirs, or other party with legal title to the property can also choose to sell the property to repay a reverse mortgage. If the property is sold for more than the loan balance, the remaining proceeds can go to the borrower’s estate, heirs, or other party with legal title to the property. If the loan balance is higher than the property’s value, the borrower’s estate, heirs, or other party with legal title to the property can sell the property for at least 95% of the current appraised value, or they can choose to voluntarily transfer the property to the lender through a deed in lieu of foreclosure, avoiding the foreclosure process.

Melinda filed a lawsuit on behalf of Ms. Richarson because the lender foreclosed before the court authorized the foreclosure, and for the lender’s failure to afford her rights as a party with legal title to the property.

“Too often, predatory practices exploit vulnerable individuals, leaving them with little recourse,” said Ms. Lopez. “Our mission is to ensure justice prevails and that those who have been wronged have a chance to rebuild their lives.”

Ms. Richardson hopes the eviction proceedings against her will be dismissed and the foreclosure sale will be reversed. She eagerly anticipates the chance to assert her rights and independently determine the future of her home that will help preserve the historical purpose of this great neighborhood.