Comments on: Beware the reverse-mortgage ripoff http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/ Money Magazine looks at a wide range of personal finance issues and asks for your feedback. Tue, 22 Dec 2009 00:19:01 +0000 http://wordpress.com/ hourly 1 By: mike ames, west haven CT http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-21503 mike ames, west haven CT Mon, 19 Oct 2009 21:37:46 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-21503 I spent 15 years in the mortgage business, when I turned 62 I got a reverse mortgage and it was the smartest thing I ever did. God Bless America. I also get VA medical benefits. This country is the best there is.No stinking politician should ever apologize for America. I spent 15 years in the mortgage
business, when I turned 62 I got
a reverse mortgage and it was
the smartest thing I ever did.
God Bless America. I also get VA
medical benefits. This country is
the best there is.No stinking politician
should ever apologize for America.

]]> By: Brock, Columbus, OH http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-21499 Brock, Columbus, OH Mon, 19 Oct 2009 20:57:37 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-21499 I don't doubt that a majority of people with reverse mortgages are better off because of them, but based on the comments, there are a lot of people in the reverse mortgage business who are worried about their line of work. My guess is that some reverse mortgage lender or group coordinated their associates to all leave comments on this subject. Notice their similarities (the key here is word choice). The funny thing is that by repeating the same things in the same way often enough can eventually convince people that it's the truth. These very similarly written comments remind me of the coordination to fight universal health care. I love how they try to make it seem like these right-wing protesters "spontaneously" appeared at the same place at the same time to rally against public health care options (without coordination, coaxing, or money changing hands). I simply don't buy it. People with a half set of teeth who have Confederate flags on the back of their 20 year old rust-bucket pick-up trucks don't have a huge interest in defending health care insurers' profits. Wake up, people. I don't doubt that a majority of people with reverse mortgages are better off because of them, but based on the comments, there are a lot of people in the reverse mortgage business who are worried about their line of work. My guess is that some reverse mortgage lender or group coordinated their associates to all leave comments on this subject. Notice their similarities (the key here is word choice). The funny thing is that by repeating the same things in the same way often enough can eventually convince people that it's the truth.

These very similarly written comments remind me of the coordination to fight universal health care. I love how they try to make it seem like these right-wing protesters "spontaneously" appeared at the same place at the same time to rally against public health care options (without coordination, coaxing, or money changing hands). I simply don't buy it. People with a half set of teeth who have Confederate flags on the back of their 20 year old rust-bucket pick-up trucks don't have a huge interest in defending health care insurers' profits. Wake up, people.

]]> By: Mr Lyn Idaho Falls ID http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-19602 Mr Lyn Idaho Falls ID Sat, 01 Aug 2009 18:19:49 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-19602 So some one tell me what is the other end of this reverse mortgage stick? What happens when they can no longer live alone? They still have no money, the house is small and old and no one is buying. They can't get Medicaid because they "own" a home. So now they are REALLY stuck! Loan will come due if she moves out and there is no way to pay it back. What do we do now??? So some one tell me what is the other end of this reverse mortgage stick? What happens when they can no longer live alone? They still have no money, the house is small and old and no one is buying. They can't get Medicaid because they "own" a home. So now they are REALLY stuck! Loan will come due if she moves out and there is no way to pay it back. What do we do now???

]]> By: William R. Hornbeck, Leesburg, VA http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-18672 William R. Hornbeck, Leesburg, VA Mon, 20 Jul 2009 23:37:38 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-18672 A reverse mortgage is simply a Home Equity Loan for senior homeowners [with some very special benefits]. Since less than 2% of eligible homeowners have ever participated in the program, it is so easy for false information to be passed along as truths. Noise is not truth just because it is heard loudest in a small group. But, consider this...urban legends abound on almost every subject and most all are simply inaccurate. Let's consider these points: (a) <b>Big fees not true.</b> The fees are always less than what it would cost to sell the home. Where are the headlines that scream about the fees that the Realtor charges to take a sales order? Even experienced Realtors will agree that the actual cost to sell a home reaches somewhere above 10% total costs. Add up the seller concessions at settlement, the real estate commission, the costs of moving which include the labor, the truck, the new utility deposits, and more. To sell a $400,000 home will cost around $40,000 in fees. A Reverse mortgage on the same house will cost less than $20,000. Think of it this way...a reverse mortgage is a way for a homeowner to, in a sense, sell the home to themselves. They get some of their profit in hand, ie., equity, and they get to keep the home, too. Let's stop yelling nonsense and start thinking a bit. (b) <b>All Loan Officers are not scum.</b> Stop it already! Sure, there are criminals out there and they should rot in jail. But, there are plenty of decent, honest, compassionate, experienced, and caring people who love what they do and enjoy a quality of life that comes from the joy of helping elder clients consider positive ways to work out their financial issues and solutions under the guidance of professional assistance. (c) <b>The "news" is partial.</b> Let's be reasonable here. Do you believe everything you read? Do you believe that every journalist actually researches all the points of their written article? If you look at most negative stories in the press, they are almost always the same story - "Miss Jones gets Reverse Mortgage, Loses Everything". Turns out that the criminal got her to get the loan so that he/she could invest her funds in the excellent opportunity for frog-leg futures. And, true, everything was lost. But, that was a criminal act...no different from painting driveways black. Be realistic, here. That was not the fault of the reverse mortgage. That was a criminal act and is no more the fault of the reverse mortgage financial product than you would place the blame for someone losing their savings in Las Vegas after taking out a regular loan from, say, Bank of America. It is not the fault of the source of funds but, rather, the fault of a criminal act combined, perhaps, with faulty reasoning. (d) <b>Ask the good people</b> who have actually benefited from the power of a reverse mortgage. Please, talk to the ones who actually know the facts. Call a lender. Ask to speak to a client. (e) <b>Researchers estimate that nearly 78% of all older adult households</b> do not have sufficient resources to sustain them through their retirement years. This fact and other truths can be found in the detailed research document just released by MetLife and the National Council on Aging. You can read it at http://seniorlifestylemortgage.com/pdf/tappingequity.pdf My view is that it is time to put the reverse mortgage bashing to rest and to accept the reality that this federally insured lending program has incredible benefits. A Reverse Mortgage is a valid, well-designed financial tool that solves problems in a safe and secure manner. You, too, may seek its benefits at the appropriate time. And, besides, the product has an incorrect name. No one actually "reverses" anymore. That's what the borrowers did when they wanted to convert equity into a monthly proceeds stream. Now, almost everyone prefers the funds to remain in an always accessible credit line. That is why I prefer to call it a Senior Lifestyle Equity Loan. ~ A reverse mortgage is simply a Home Equity Loan for senior homeowners [with some very special benefits].

Since less than 2% of eligible homeowners have ever participated in the program, it is so easy for false information to be passed along as truths. Noise is not truth just because it is heard loudest in a small group. But, consider this…urban legends abound on almost every subject and most all are simply inaccurate.

Let's consider these points:

(a) Big fees not true. The fees are always less than what it would cost to sell the home. Where are the headlines that scream about the fees that the Realtor charges to take a sales order? Even experienced Realtors will agree that the actual cost to sell a home reaches somewhere above 10% total costs. Add up the seller concessions at settlement, the real estate commission, the costs of moving which include the labor, the truck, the new utility deposits, and more. To sell a $400,000 home will cost around $40,000 in fees. A Reverse mortgage on the same house will cost less than $20,000. Think of it this way…a reverse mortgage is a way for a homeowner to, in a sense, sell the home to themselves. They get some of their profit in hand, ie., equity, and they get to keep the home, too. Let's stop yelling nonsense and start thinking a bit.

(b) All Loan Officers are not scum. Stop it already! Sure, there are criminals out there and they should rot in jail. But, there are plenty of decent, honest, compassionate, experienced, and caring people who love what they do and enjoy a quality of life that comes from the joy of helping elder clients consider positive ways to work out their financial issues and solutions under the guidance of professional assistance.

(c) The "news" is partial. Let's be reasonable here. Do you believe everything you read? Do you believe that every journalist actually researches all the points of their written article? If you look at most negative stories in the press, they are almost always the same story – "Miss Jones gets Reverse Mortgage, Loses Everything". Turns out that the criminal got her to get the loan so that he/she could invest her funds in the excellent opportunity for frog-leg futures. And, true, everything was lost. But, that was a criminal act…no different from painting driveways black. Be realistic, here. That was not the fault of the reverse mortgage. That was a criminal act and is no more the fault of the reverse mortgage financial product than you would place the blame for someone losing their savings in Las Vegas after taking out a regular loan from, say, Bank of America. It is not the fault of the source of funds but, rather, the fault of a criminal act combined, perhaps, with faulty reasoning.

(d) Ask the good people who have actually benefited from the power of a reverse mortgage. Please, talk to the ones who actually know the facts. Call a lender. Ask to speak to a client.

(e) Researchers estimate that nearly 78% of all older adult households do not have sufficient resources to sustain them through their retirement years. This fact and other truths can be found in the detailed research document just released by MetLife and the National Council on Aging. You can read it at http://seniorlifestylemortgage.com/pdf/tappingequity.pdf

My view is that it is time to put the reverse mortgage bashing to rest and to accept the reality that this federally insured lending program has incredible benefits. A Reverse Mortgage is a valid, well-designed financial tool that solves problems in a safe and secure manner. You, too, may seek its benefits at the appropriate time.

And, besides, the product has an incorrect name. No one actually "reverses" anymore. That's what the borrowers did when they wanted to convert equity into a monthly proceeds stream. Now, almost everyone prefers the funds to remain in an always accessible credit line. That is why I prefer to call it a Senior Lifestyle Equity Loan.

~

]]> By: Mike, Redwood City, CA http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-18243 Mike, Redwood City, CA Fri, 10 Jul 2009 15:55:19 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-18243 Many 'financial products' (including reverse mortgages) are too complicated to be understood by normal people. Whether or not they are designed to be so confusing is a debate subject. In fact, many of the people MARKETING and SELLING 'financial products' (including all types of mortgages) do not even understand their own products. They usually have very little product training. They're just trying to capture fees, and mortgages are usually laden with fees. So, the buyer must beware. If the agent cannot explain the deal in plain english or you can't extract the terms of the deal from the paperwork, you must either get up and walk out of their office or kick them out of your home immediately. There are literally thousands of people and companies hawking mortgages, so you'll always have other options. But, once you sign the deal, they'll try to enforce it, so make sure it's what you really want: you're stuck with it. Many 'financial products' (including reverse mortgages) are too complicated to be understood by normal people. Whether or not they are designed to be so confusing is a debate subject.

In fact, many of the people MARKETING and SELLING 'financial products' (including all types of mortgages) do not even understand their own products. They usually have very little product training. They're just trying to capture fees, and mortgages are usually laden with fees.

So, the buyer must beware. If the agent cannot explain the deal in plain english or you can't extract the terms of the deal from the paperwork, you must either get up and walk out of their office or kick them out of your home immediately. There are literally thousands of people and companies hawking mortgages, so you'll always have other options.

But, once you sign the deal, they'll try to enforce it, so make sure it's what you really want: you're stuck with it.

]]> By: D. I., Providence, RI http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-18149 D. I., Providence, RI Mon, 06 Jul 2009 23:26:51 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-18149 This is sensationalism trying to pass as journalism. I researched reverse mortgages for a year before my bank offered them. We educate seniors constantly that the product isn't for everyone, show the alternatives (often as costly), urge them to bring in their accountants or family members to make the decision. Most adult children do not want the home, and care that they parents want to fend for themselves without asking for handouts from the kids. If there's money after the parents pass, great, if not, it wasn't the kids money to begin with-the parents used their equity to support themselves. Heck, many of their kids did that-use the house as a piggybank to take out equity to support a lifestyle beyond their means. When values no longer grew, that's what brought down the housing industry. Who cannot understand the basic concept that HUD/FHA charges 2% to insure the loan to the lender. The lender has taken on the risk of people who often have credit scores that wouldn't get them a loan (even a line of credit, which, by the way, still must be paid. Many who did that have found lenders freezing the line or cutting it in half due to the drop in value-how are they to pay for their medication then?), little by way of assets or cash flow to make a payment, assure growth in the line of credit, and, oh, by the way, not know when they are ever getting repaid. The insurance is there to protect the borrower also in case the lender defaults-HUD will step in to make sure the payments are made to the borrowers. That wouldn't happen if you lose your investments in the stock market or if your mutual fund takes a hit. There is a term to the loan-when the borrowers are 150! Would you lend that much money, even to your best friend when the repayment is at an indefinite time down the road? The costs of the mortgage are the same as any other, only lenders can't build the costs into the rate as "no points, no closing costs" mortgage, but the costs can come out of the closing funds, along with the insurance, which is why the initial draw is so high. Do you think most seniors want to sell their home? Many would have to make improvements just to make it marketable, pay the real estate commission (5-6%) and still find replacement housing. How much to pay the movers, first and last month's rent, plus security deposit. Move into senior housing? Can be on a waiting list for years, and by the way, may have to give the proceeds of their home away in order to qualify to get in as low income. The independent, HUD-approved counseling must be obtained prior to the processing of an application, so how is it the author is blaming loan officers for seniors making a reverse mortgage a choice that works for them, and not for the borrower who doesn't have to make a mortgage payment? HUD is making more on the deal than anyone else involved. I have seen such a positive effect on the overall well-being of seniors after taking a reverse mortgage, and we receive many thank-you cards and calls. Why do so many people think that Medicare/Senior Welfare is the answer? There is such a movement to keep assets away from the Government's eyes in order to get the nursing home paid for. Who do you think is paying? And wouldn't you rather be in your own comfortable home, even if you had to pay for nursing assistance than to be warehoused in a nursing home? And what makes people think that someone 62+ has suddenly lost all their brains and are "victimized". Many make much smarter financial decisions than their children or grandchildren, so give them credit for doing the right thing. If there are problematic loan officers, get them out, but don't throw out a HUD program that's been proven since 1989 because 3% are not "totally satisfied". The program promises that a mortgage payment does not have to be made while at least one borrower lives in the home, or there is not a break in residency for more than 12 consecutive mos. Taxes, insurance and maintenance are required to be taken care of, just like the terms of any other mortgage. If you don't pay taxes, the municipality has a lien they can act on. There are many, many pages of disclosures, none of it is hidden, and, as in any other primary residence refinance, the borrowers may rescind the transaction within 3 business days. Many states also have a waiting period after the loan is approved and a commitment letter sent as a cooling off period, so there is no rush to closing. Many of the seniors we educate come back to us years after we first see them, when the time is right for them. Increasingly, we're seeing that they no longer own the home free and clear, about half currently have a first mortgage and the squeeze to make those payments is crushing them. They are joyous to get rid of that burden. When working on various scenarios for them, it is discouraging to know many have not been eating correctly or taking the correct dosage of medication in order to get by. Please consider these people before painting the product as evil. It is not for everyone, but can bring great financial and emotional peace of mind to those who have no other vehicle to help them. This is sensationalism trying to pass as journalism. I researched reverse mortgages for a year before my bank offered them. We educate seniors constantly that the product isn't for everyone, show the alternatives (often as costly), urge them to bring in their accountants or family members to make the decision. Most adult children do not want the home, and care that they parents want to fend for themselves without asking for handouts from the kids. If there's money after the parents pass, great, if not, it wasn't the kids money to begin with-the parents used their equity to support themselves. Heck, many of their kids did that-use the house as a piggybank to take out equity to support a lifestyle beyond their means. When values no longer grew, that's what brought down the housing industry. Who cannot understand the basic concept that HUD/FHA charges 2% to insure the loan to the lender. The lender has taken on the risk of people who often have credit scores that wouldn't get them a loan (even a line of credit, which, by the way, still must be paid. Many who did that have found lenders freezing the line or cutting it in half due to the drop in value-how are they to pay for their medication then?), little by way of assets or cash flow to make a payment, assure growth in the line of credit, and, oh, by the way, not know when they are ever getting repaid. The insurance is there to protect the borrower also in case the lender defaults-HUD will step in to make sure the payments are made to the borrowers. That wouldn't happen if you lose your investments in the stock market or if your mutual fund takes a hit. There is a term to the loan-when the borrowers are 150! Would you lend that much money, even to your best friend when the repayment is at an indefinite time down the road? The costs of the mortgage are the same as any other, only lenders can't build the costs into the rate as "no points, no closing costs" mortgage, but the costs can come out of the closing funds, along with the insurance, which is why the initial draw is so high. Do you think most seniors want to sell their home? Many would have to make improvements just to make it marketable, pay the real estate commission (5-6%) and still find replacement housing. How much to pay the movers, first and last month's rent, plus security deposit. Move into senior housing? Can be on a waiting list for years, and by the way, may have to give the proceeds of their home away in order to qualify to get in as low income.
The independent, HUD-approved counseling must be obtained prior to the processing of an application, so how is it the author is blaming loan officers for seniors making a reverse mortgage a choice that works for them, and not for the borrower who doesn't have to make a mortgage payment? HUD is making more on the deal than anyone else involved. I have seen such a positive effect on the overall well-being of seniors after taking a reverse mortgage, and we receive many thank-you cards and calls. Why do so many people think that Medicare/Senior Welfare is the answer? There is such a movement to keep assets away from the Government's eyes in order to get the nursing home paid for. Who do you think is paying? And wouldn't you rather be in your own comfortable home, even if you had to pay for nursing assistance than to be warehoused in a nursing home? And what makes people think that someone 62+ has suddenly lost all their brains and are "victimized". Many make much smarter financial decisions than their children or grandchildren, so give them credit for doing the right thing. If there are problematic loan officers, get them out, but don't throw out a HUD program that's been proven since 1989 because 3% are not "totally satisfied". The program promises that a mortgage payment does not have to be made while at least one borrower lives in the home, or there is not a break in residency for more than 12 consecutive mos. Taxes, insurance and maintenance are required to be taken care of, just like the terms of any other mortgage. If you don't pay taxes, the municipality has a lien they can act on. There are many, many pages of disclosures, none of it is hidden, and, as in any other primary residence refinance, the borrowers may rescind the transaction within 3 business days. Many states also have a waiting period after the loan is approved and a commitment letter sent as a cooling off period, so there is no rush to closing. Many of the seniors we educate come back to us years after we first see them, when the time is right for them. Increasingly, we're seeing that they no longer own the home free and clear, about half currently have a first mortgage and the squeeze to make those payments is crushing them. They are joyous to get rid of that burden. When working on various scenarios for them, it is discouraging to know many have not been eating correctly or taking the correct dosage of medication in order to get by. Please consider these people before painting the product as evil. It is not for everyone, but can bring great financial and emotional peace of mind to those who have no other vehicle to help them.

]]> By: Nelda Tooke Tupelo Ms http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-18147 Nelda Tooke Tupelo Ms Mon, 06 Jul 2009 23:02:23 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-18147 Thanks for your concern about Reverse Mortgages. My experience has been very confusing. Im 62 years old, retired and have been researching rev mortg for about 2 years. Ive talked to many people and have been given conflicting information. I live in a manufactured home, and ive been told no they dont qualify and yes they do. Ive been told a concrete foundation is required, ive been told its not. I had a foundation expert look at my foundation and he said its going to cost from $5,000 to $8,000 to bring the foundation up to code. Ive been told by another inspector that on an existing man home you dont have to comply to all the same regulations if your home is new. This last inspector said I would not need any foundation repair and I could start the loan without any repair costs to me. Also I had a real concern about when the loan becomes due and payable what would my heirs owe if they chose to live in the home after my death. My question was, would they owe the loan balance or just the appraisal value and I was assured by a bank loan officer that they would only owe the appraisal value. Later found out thats not true, if they continue to live in home they will owe the loan balance. Also I had a concern about what happens if I go into a nursing home, and was told by the same loan officer, she didnt really know but thought my heirs would be okay and not have to repay the loan at this time. Again I found out thats not true. The loan becomes due when you are confined to a nursing home for 12 months or longer. I continued to do research and thought I had all the answers, and decided to go ahead and take out a loan application to get the loan. I started by doing the required counseling, and once again had more questions than answers. The session was not to my satisfication and when he sent me my copy to be signed and sent to the bank, I was so confused about what he stated that was discussed, I could not sign the form and did not sent it back. A few days later the bank sent me a packet of documents to sign and return. Theres about 50 pages of documents, with very confusing language which I dont understand, and I would need to get a lawyer to go over every page line by line. Ive now decided not to do the Reverse Mortgage. I feel ive been deceived by people who need to all get on the same page. I cant imagine anyone would sign loan papers that are so confusing. Its not simple like you hear on TV and all the ads. Its the most confusing procedure Ive ever seen. Ive worked in banking for 30 years where I processed paper work for regular mortgage loans, and am somewhat familiar with documents that are signed by the customer but I have never seen anything to compare to the Rev Mortg procedure. Thanks again, Thanks for your concern about Reverse Mortgages. My experience has been very confusing. Im 62 years old, retired and have been researching rev mortg for about 2 years. Ive talked to many people and have been given conflicting information. I live in a manufactured home, and ive been told no they dont qualify and yes they do. Ive been told a concrete foundation is required, ive been told its not. I had a foundation expert look at my foundation and he said its going to cost from $5,000 to $8,000 to bring the foundation up to code. Ive been told by another inspector that on an existing man home you dont have to comply to all the same regulations if your home is new. This last inspector said I would not need any foundation repair and I could start the loan without any repair costs to me. Also I had a real concern about when the loan becomes due and payable what would my heirs owe if they chose to live in the home after my death. My question was, would they owe the loan balance or just the appraisal value and I was assured by a bank loan officer that they would only owe the appraisal value. Later found out thats not true, if they continue to live in home they will owe the loan balance. Also I had a concern about what happens if I go into a nursing home, and was told by the same loan officer, she didnt really know but thought my heirs would be okay and not have to repay the loan at this time. Again I found out thats not true. The loan becomes due when you are confined to a nursing home for 12 months or longer. I continued to do research and thought I had all the answers, and decided to go ahead and take out a loan application to get the loan. I started by doing the required counseling, and once again had more questions than answers. The session was not to my satisfication and when he sent me my copy to be signed and sent to the bank, I was so confused about what he stated that was discussed, I could not sign the form and did not sent it back. A few days later the bank sent me a packet of documents to sign and return. Theres about 50 pages of documents, with very confusing language which I dont understand, and I would need to get a lawyer to go over every page line by line. Ive now decided not to do the Reverse Mortgage. I feel ive been deceived by people who need to all get on the same page. I cant imagine anyone would sign loan papers that are so confusing. Its not simple like you hear on TV and all the ads. Its the most confusing procedure Ive ever seen. Ive worked in banking for 30 years where I processed paper work for regular mortgage loans, and am somewhat familiar with documents that are signed by the customer but I have never seen anything to compare to the Rev Mortg procedure. Thanks again,

]]> By: Mike Gruley Northville, MI http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-18059 Mike Gruley Northville, MI Sat, 04 Jul 2009 17:00:41 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-18059 Very typical, uninformed article by someone who never actually discussed a reverse mortgage with someone who has one. Here's an idea...if you're looking for seniors who don't like their reverse mortgages, contact AARP. They did a survey in 2006 which showed that 97% of respondent said that the RM had a positive affect on their lives. You can ask to talk to the 3% who didn't like the RM and write another story making the 3% group sound like the majority. Don't forget to leave out the 97% group...it will kill the enflamatory nature of the story. Very typical, uninformed article by someone who never actually discussed a reverse mortgage with someone who has one. Here's an idea…if you're looking for seniors who don't like their reverse mortgages, contact AARP. They did a survey in 2006 which showed that 97% of respondent said that the RM had a positive affect on their lives. You can ask to talk to the 3% who didn't like the RM and write another story making the 3% group sound like the majority. Don't forget to leave out the 97% group…it will kill the enflamatory nature of the story.

]]> By: Mike - Arizona http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17936 Mike - Arizona Thu, 02 Jul 2009 16:07:00 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17936 The critics of the article obviously do not work in the financial industry or work with retirees. I work in a bank and have for over 7 years near Sun City, a huge retirement community here in Arizona. I have seen dozens of retirees bring me their signed or soon to be signed reverse mortgage paperwork and I am SHOCKED that anyone would take out these types of financial products. Most have initial fees starting at $10K to $15K. and it gets worse from there. Do not believe the other posters on this article. The elderly are getting shafted by these products. The critics of the article obviously do not work in the financial industry or work with retirees. I work in a bank and have for over 7 years near Sun City, a huge retirement community here in Arizona. I have seen dozens of retirees bring me their signed or soon to be signed reverse mortgage paperwork and I am SHOCKED that anyone would take out these types of financial products. Most have initial fees starting at $10K to $15K. and it gets worse from there. Do not believe the other posters on this article. The elderly are getting shafted by these products.

]]> By: Chuck Wright Omaha, Ne http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17935 Chuck Wright Omaha, Ne Thu, 02 Jul 2009 16:01:49 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17935 Thank you for this interesting article. I am 65 years old and own my home. Although I do not plan for a reverse mortgage. I am glad for the opportunity to go to appropriate web sies for information. Thank you for this interesting article. I am 65 years old and own my home. Although I do not plan for a reverse mortgage. I am glad for the opportunity to go to appropriate web sies for information.

]]> By: Camilo, Chicago, IL http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17934 Camilo, Chicago, IL Thu, 02 Jul 2009 14:03:33 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17934 This article is very sensationalist. Reverse Mortgages are not all bad and they make sense for a lot of clients. I meet with people all the time and when we can't refi them traditionally, the only option is to sell the house if it has equity in it. However many time a senior is not looking to pick up and move, they want to stay right where they are until they die. This is when a reverse mortgage makes sense. Obvioulsy shady characters exist in every business, if you are not careful you can get taken for a ride any time any where anyone is selling you a product. Make sure the lender and broker are licensed, use references!!!!! What ever happened to doing your homework?? SO MANY times I deal with clients that have been abused and I ask them what happen and 99.9% of the time it was a by someone they didn't know and met through mail or the internet. Go local, and ask for references, call them up, do your homework. If someone has worked their whole career th right way and has references you have checked up on, then go with them. You do that for a babysitter why wouldn't you do that for a big time purchase or financial decision? If you meet someone through the mail or internet BE EXTRA CAREFUL, check out the company and the agent against any state web sites you can for their business record. This article is very sensationalist. Reverse Mortgages are not all bad and they make sense for a lot of clients. I meet with people all the time and when we can't refi them traditionally, the only option is to sell the house if it has equity in it. However many time a senior is not looking to pick up and move, they want to stay right where they are until they die. This is when a reverse mortgage makes sense. Obvioulsy shady characters exist in every business, if you are not careful you can get taken for a ride any time any where anyone is selling you a product. Make sure the lender and broker are licensed, use references!!!!! What ever happened to doing your homework?? SO MANY times I deal with clients that have been abused and I ask them what happen and 99.9% of the time it was a by someone they didn't know and met through mail or the internet. Go local, and ask for references, call them up, do your homework. If someone has worked their whole career th right way and has references you have checked up on, then go with them. You do that for a babysitter why wouldn't you do that for a big time purchase or financial decision? If you meet someone through the mail or internet BE EXTRA CAREFUL, check out the company and the agent against any state web sites you can for their business record.

]]> By: Mark Miskiel, Cornville, AZ http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17931 Mark Miskiel, Cornville, AZ Thu, 02 Jul 2009 04:15:58 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17931 Donna Rosato did not do her research when writing this article and it was irresponsible to publish it. Donna Rosato did not do her research when writing this article and it was irresponsible to publish it.

]]> By: ismael maldonado valley center ca. http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17930 ismael maldonado valley center ca. Thu, 02 Jul 2009 01:23:09 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17930 the reverse mortgage is not the problem.......but the broker that pushes these things on the homeowner always wants to "SELL" some off the wall financial product that the homeowner does not need and is usually a great bg ripoff! the reverse mortgage is not the problem…….but the broker that pushes these things on the homeowner always wants to "SELL" some off the wall financial product that the homeowner does not need and is usually a great bg ripoff!

]]> By: susan grant, barstow, ca. http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17929 susan grant, barstow, ca. Wed, 01 Jul 2009 23:38:14 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17929 I have a reverse mortgage horror story, Don't ever get one if it is for a divorce to buy the other person out, My husband did this and we lived over 30 years in our home, I signed off the deed but never got my share of the equity, they deposited it all in his account, Then besides over $10,000. in fees to make the loan, a year later before the divorce was final, he got sick and died, All of a sudden I had half the income, all the bills, and now they are going to foreclose on the only home I have had in over 30 years, They are rude to me and there is no way I can refinance because of income etc, We were married over 40 years, and after all that, I am the one who loses all the way around, Not only am I sitting here with bills, half the income, but soon to be homeless, I could have been on this loan except we were getting divorced and the court ordered him to pay me my half of the equity. I signed off the deed in front of the loan people and they had talked with the attorneys and knew what I was supposed to recieve, and they never gave me a dime, and say this isn't their problem. So now he is dead, I am in this mess, and they are about to start foreclosue, This is horrible how they collect interest all the years you pay on your home, then you get old, and they make one of these loans, and in the end they get your home after all, unless the kids can pay it off, I think it is a real sneaky way to get everything someone works for all their life, and they don't even blink an eye in my situatiion, These should be outlawed. Everyone I have asked seems to think I am just out of luck even tho they stole my equity. We were married over 40 years and I have nothing!!! I have a reverse mortgage horror story, Don't ever get one if it is for a divorce to buy the other person out, My husband did this and we lived over 30 years in our home, I signed off the deed but never got my share of the equity, they deposited it all in his account, Then besides over $10,000. in fees to make the loan, a year later before the divorce was final, he got sick and died, All of a sudden I had half the income, all the bills, and now they are going to foreclose on the only home I have had in over 30 years, They are rude to me and there is no way I can refinance because of income etc, We were married over 40 years, and after all that, I am the one who loses all the way around, Not only am I sitting here with bills, half the income, but soon to be homeless, I could have been on this loan except we were getting divorced and the court ordered him to pay me my half of the equity. I signed off the deed in front of the loan people and they had talked with the attorneys and knew what I was supposed to recieve, and they never gave me a dime, and say this isn't their problem. So now he is dead, I am in this mess, and they are about to start foreclosue, This is horrible how they collect interest all the years you pay on your home, then you get old, and they make one of these loans, and in the end they get your home after all, unless the kids can pay it off, I think it is a real sneaky way to get everything someone works for all their life, and they don't even blink an eye in my situatiion, These should be outlawed. Everyone I have asked seems to think I am just out of luck even tho they stole my equity. We were married over 40 years and I have nothing!!!

]]> By: Joseph Sloboda, Fort Lauderdale, FL http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17923 Joseph Sloboda, Fort Lauderdale, FL Wed, 01 Jul 2009 21:25:50 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17923 I must say that I am shocked by what appears to be the author's lack of knowledge on how the Reverse Mortgage program works. My father in-law who will lose his disability benefits in 2 yrs has basically assured himself that he will never have to worry about keeping a roof over his head. At his age and in his health he has enough to worry about. Lets face it, every mortgage option comes with fees and quite honestly if you look at the fees associated with a Reverse Mtg the excessive figures are not arbitrary amounts that are added on by the brokers, these are fees regulated by FHA for mortgage insurance and closing costs - the brokers are tightly regulated on what they can charge. In the current declining housing market I am thankful that my father in-law finally listened to us instead of the negative press coverage and moved forward with his HECM - had he only done so a year earlier he would have rcvd a much larger amount of money. We are not concerned about what happens with the house when he dies, if there is some value left in it then great we will have something to put towards the kids college funds but at least for now we know that he does not have to struggle with a monthly mortgage payment and we no longer have to stress about how we are going to be able to help him make up the shortfall I must say that I am shocked by what appears to be the author's lack of knowledge on how the Reverse Mortgage program works. My father in-law who will lose his disability benefits in 2 yrs has basically assured himself that he will never have to worry about keeping a roof over his head. At his age and in his health he has enough to worry about. Lets face it, every mortgage option comes with fees and quite honestly if you look at the fees associated with a Reverse Mtg the excessive figures are not arbitrary amounts that are added on by the brokers, these are fees regulated by FHA for mortgage insurance and closing costs – the brokers are tightly regulated on what they can charge. In the current declining housing market I am thankful that my father in-law finally listened to us instead of the negative press coverage and moved forward with his HECM – had he only done so a year earlier he would have rcvd a much larger amount of money. We are not concerned about what happens with the house when he dies, if there is some value left in it then great we will have something to put towards the kids college funds but at least for now we know that he does not have to struggle with a monthly mortgage payment and we no longer have to stress about how we are going to be able to help him make up the shortfall

]]> By: Ray Fry, Oakland, CA http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17919 Ray Fry, Oakland, CA Wed, 01 Jul 2009 20:05:35 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17919 The FTC reported that they had 4,000,000 complaints last year about financial products. Their official records show that 50 of those 4 million complaints were about reverse mortgages. I wonder what the other 3,999,950 were about? The FTC reported that they had 4,000,000 complaints last year about financial products. Their official records show that 50 of those 4 million complaints were about reverse mortgages. I wonder what the other 3,999,950 were about?

]]> By: Kevin McNichol, Palm Harbor, Florida http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17918 Kevin McNichol, Palm Harbor, Florida Wed, 01 Jul 2009 17:15:17 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17918 This article is ridiculous. It's horrible. Let's say the author or any one else for that matter had some money to lend as a mortgage. So we negotiate the details which include the fact that I don't want to make any monthly payments, I don't want to have to pay her back until I either die or sell the home, I want a credit line that will grow over time, I want her to guarantee that I nor my heirs can ever be personally responsible to repay the loan and that my home can not be foreclosed on as long as I pay taxes and insurance premiums, I want a guarantee that if she can't make good on my line of credit that an agency of the US Government will step in and make the payments, and she can't lower my credit line if my home falls in value. Oh, I almost forgot, I have lousy credit and very little income, I want a low fixed interest rate and I want to be able to pre pay with no cost to me. Of course she would never agree to my demands. Who would? The only way to have these conditions met is to do a reverse mortgage. What is she whinning about? This article is ridiculous. It's horrible. Let's say the author or any one else for that matter had some money to lend as a mortgage. So we negotiate the details which include the fact that I don't want to make any monthly payments, I don't want to have to pay her back until I either die or sell the home, I want a credit line that will grow over time, I want her to guarantee that I nor my heirs can ever be personally responsible to repay the loan and that my home can not be foreclosed on as long as I pay taxes and insurance premiums, I want a guarantee that if she can't make good on my line of credit that an agency of the US Government will step in and make the payments, and she can't lower my credit line if my home falls in value. Oh, I almost forgot, I have lousy credit and very little income, I want a low fixed interest rate and I want to be able to pre pay with no cost to me. Of course she would never agree to my demands. Who would? The only way to have these conditions met is to do a reverse mortgage. What is she whinning about?

]]> By: Nan, Willow Grove, PA http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17917 Nan, Willow Grove, PA Wed, 01 Jul 2009 16:53:23 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17917 To paraphrase "reporter" Donna Rosato: "If you are considering taking out a reverse mortgage or have a parent or family member who is, don’t fall for a pitch from a [cable news writer who does sloppy and biased reporting and] who cares more about a lucrative [salary and benefits] than determining whether a reverse mortgage makes sense for you." To paraphrase "reporter" Donna Rosato: "If you are considering taking out a reverse mortgage or have a parent or family member who is, don’t fall for a pitch from a [cable news writer who does sloppy and biased reporting and] who cares more about a lucrative [salary and benefits] than determining whether a reverse mortgage makes sense for you."

]]> By: Mike, Milton Fl http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17916 Mike, Milton Fl Wed, 01 Jul 2009 14:01:46 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17916 I helped my sisterinlaw get a reverse mortgage. She had a farm home loan and had enough equity to get out of it and now has no house payment. She was workin 3 jobs to get by before and now can live out her years much more comfortable. Her son however will have to pay off the loan if he wants the house when she passes--same as if she kept the farm home mortgage and made payment for another 12 years!! I will do a reverse mortgage as I have no one to leave my (paid for) house and I could use the cash I helped my sisterinlaw get a reverse mortgage. She had a farm home loan and had enough equity to get out of it and now has no house payment. She was workin 3 jobs to get by before and now can live out her years much more comfortable. Her son however will have to pay off the loan if he wants the house when she passes–same as if she kept the farm home mortgage and made payment for another 12 years!! I will do a reverse mortgage as I have no one to leave my (paid for) house and I could use the cash

]]> By: Brian Levitan, Oakbrook Terrace, IL http://moremoney.blogs.money.cnn.com/2009/06/30/beware-the-reverse-mortgage-ripoff/#comment-17915 Brian Levitan, Oakbrook Terrace, IL Wed, 01 Jul 2009 04:37:12 +0000 http://moneyfeatures.blogs.money.cnn.com/?p=1462#comment-17915 Show this article to the senior that is 3 months down on their mortgage, has a negative cash flow, and rising medical bills and show me a better option to keep them in their home, create a postive cash flow in most cases and pay off some of the medical bills. The costs of a HECM are high? Sure they are. It is not the 2 points making the costs so high, it is all of the costs. Every broker out there is selling regular FHA loans at 2 pts plus in ysp and upfront. Why should this loan be any different. And for this two points, half the time I have to make several trips to a customers home which is part of the service I offer when doing these loans. Seniors dont want to drive places, they dont have their trusts in convienent locations when you come to their house, most dont have fax machines to fax stuff, and all of the seniors I have delt with have liked the extra hand holding through the process. I never recommend buying other products with the proceeds. I am there to provide a solution to keep them in their home, get some cash for any needs, and reduce their monthly expenses. Anything else is left to a financial planner. Show this article to the senior that is 3 months down on their mortgage, has a negative cash flow, and rising medical bills and show me a better option to keep them in their home, create a postive cash flow in most cases and pay off some of the medical bills. The costs of a HECM are high? Sure they are. It is not the 2 points making the costs so high, it is all of the costs. Every broker out there is selling regular FHA loans at 2 pts plus in ysp and upfront. Why should this loan be any different. And for this two points, half the time I have to make several trips to a customers home which is part of the service I offer when doing these loans. Seniors dont want to drive places, they dont have their trusts in convienent locations when you come to their house, most dont have fax machines to fax stuff, and all of the seniors I have delt with have liked the extra hand holding through the process. I never recommend buying other products with the proceeds. I am there to provide a solution to keep them in their home, get some cash for any needs, and reduce their monthly expenses. Anything else is left to a financial planner.

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