Not that long ago (it seems like yesterday), I looked at reverse mortgages as a potential solution to the baby boomers' need for retirement savings issue. That was before CountryWide imploded and the housing market went into a
It turns out that some reverse mortgage seniors are being foreclosed on at the death of the one spouse who signed the document, if they can't pay off the loan. Ron Lieber, of the New York Times, reports on this unfortunate state of affairs in "A Red Flag on Reverse Mortgages." In the article, Ron provides an excellent overview of how reverse mortgages work and what they are intended for. It seems that in the effort of many people, including HUD, to caution seniors ( you have to be at least 62 years old to get a reverse mortgage ) to pay attention to costs and the sleazy activity of annuity salesmen, the impact of one spouse signing and then dying wasn't fully appreciated. It's reached the point where AARP is suing HUD.
In the immortal words of Gilda Radner : "It's always something."
Addendum: If you can only read one financial columnist, Ron Lieber is an excellent choice. I'm a fan.
The only thing most seniors know about a reverse mortgage is the magic illusion they hear in television commercials. Before anyone gets a reverse mortgage they must know the consequences for their personal circumstances, financial situation, long term need, and health. No one is helping the senior understand what those consequences will be which is why so many are in default. The way this industry does business has to change because unless the borrowers best interest is the only reason to sell a reverse mortgage seniors will continue to lose their property, equity, quality of life and could be left homeless. Sandy Jolley
ReplyDeletere: Sandy Jolley Thanks for stopping by and providing a real life perspective. Readers can view her story at http://elderfinancialterrorism.com/ourstory.html
ReplyDeleteAnother instance of the greediness of the financial services industry and the need for transparency.
Abhorrent practices by lenders within the mortgage industry are called abusive lending. Choosing the right lender is not easy… Earned or borrowed cash are all at stake, specially your home. That’s why it is very important to be watchful and evade those Rapacious Lenders.
ReplyDeleteThis is great introduction for seniors who are looking for the HECM reverse mortgage- also great title - this can program can be beneficial for many seniors and allows them to get happy in their retirement (important)
ReplyDeletereverse mortgage pros and cons
The personal experience of taking out a reverse mortgage loan has been given in the write up in a very nice way. Here, it is to be noted that reverse mortgage loans are aimed at helping the senior citizens in the country to live the rest of their lives in a better way. This actually supplements the retirement savings. To obtain this loan, your age should be at least 62 years and you must own a house as a primary residence. Here, lender makes monthly or lump sum payment to you on against your home equity. To know more about this loan, log on to http://www.mortgagefit.com/reverse.html
ReplyDeleteHi,
ReplyDeleteThanks for putting a beautiful video to showcase your ideas.Proper advice is at most necessary to make a right decision. Sometime the borrower do under estimate the hidden danger of reverse mortgage. So it means to calculate the valuable information before hand and prepare for it.
Reverse mortgage industry