Talk of The Villages Florida - View Single Post - 15,000 Floridians with Reverse Mortgages Facing Foreclosure and Homelessness
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Old 01-25-2021, 11:14 AM
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Quote:
Originally Posted by Plinker View Post
RM FORECLOSURES:

From the Naples News, 2019

15,000 Floridians at Risk of Foreclosure and Homelessness:

Earlier this year, an 83-year-old woman lost the home she has owned for more than 40 years.
She is one of thousands of senior Floridians facing the same outcome. But what sounds like a great deal can have serious pitfalls. Instead of providing a secure financial future for senior homeowners, nearly 15,000 older Floridians out of the 85,000 currently holding reverse mortgages are in danger of losing their homes in the coming years, according to data from the U.S. Department of Housing and Urban Development.
Already, 16,654 reverse mortgage holders have gone into foreclosure in the five years that ended December 2017, the most by far in the U.S. and nearly double the second-most — in California.
Reverse mortgages don’t get a person out of debt, they put people into more debt. It may solve an immediate cash-flow problem, but may not provide any long-term financial security. And homeowners whose circumstances change in ways they didn’t anticipate find themselves without their most valuable asset at an age when they need it most.

I had no idea it was this bad.
TV appears to be a mecca for these and similar sales pitches. A fee-only fiduciary financial planner can determine what is appropriate and will provide alternative options.
I have no dog in the fight (you may since you are active on this topic) but you and the others who hate this product always choose to ignore the obvious -- "If they run short, they don't pay taxes, insurance or do repairs and don't have additional resources to draw on. The bank has little choice but to foreclose to protect the security on the loan."

So whether a person has a Reverse Mortgage, a Regular Mortgage, a Home Equity Loan, or NO LOAN AT ALL, when the person fails to pay taxes (and normally insurance) on the property a lien is created and they will be foreclosed if they don't pay. If they can't or don't pay these items when they have a loan requiring NO PAYMENTS, what makes you think they would pay if they didn't?

I took the quote above directly from the article you posted but left out this fact.