Quote:
Originally Posted by John_W
I have a reverse mortgage for 3 years through Citizens Bank. The only way you can be forced out is if you fail to pay your taxes and insurance. They asked me the second year to send them a fax of my insurance, that's the only contact I have with the bank in 3 years.
The only other way is if you no longer live fulltime in the home, they will force you to sell the home. After the home is sold and they pay off the amount you have taken, plus initial closing costs, in my case $9,000 and interest, in my case about $200 a month. Right now I would owe them about $65,000, I took a $50,000 draw in the beginning.
If you own your home, you have a lot of equity that is going to waste if you never plan to resell, which in my case I don't plan on moving again since I've been in this home ten years. If I were to sell the home, we would pay back the bank $65,000 and the rest would be ours, and this is for receiving $50,000 three years ago.
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Excellent post! I believe your statements to be spot-on accurate. I would add that if the borrower had a live-in child, friend or caregiver that had been assisting them for many years and are not on the RM loan documents, they would be homeless, as well. A RM may be appropriate but the last person to determine that is the salesman. You clearly have done your homework on RM’s.
The purpose of my posts has nothing to do specifically with reverse mortgages, per se. If a huckster was peddling index annuities, variable life insurance, payday loans, etc. the only thing different would be that I would attempt to show how there are other options and many potentially devastating consequences of people not doing their due diligence before signing on the dotted line.
I started a business at the age of 29 and sold it 28 years later before my wife and I retired to TV. I was inundated with carnival barkers calling and showing up unannounced trying to sell me everything imaginable all under the guise of only trying to help me. We all know who they were trying to help!
One of my elderly relatives was about to fall victim to the tune of tens of thousands of dollars to one of these commission-based salesmen. Fortunately, I learned about it just in time to halt the transaction.
Upon moving to TV, I found my mailbox stuffed with free chicken-dinner offers. I literally received 4 such offers only two weeks ago over a period of a few days. Apparently, TV is fertile ground, providing easy prey and victims to these sleazy practices. So, the reason for my posts is that I find it absolutely despicable when unscrupulous salesmen take advantage of individuals that may be lonely, lost a spouse or simply not quite as sharp as they once were. Few things irritate me more than when unsuspecting people could end up losing a lifetime of savings built over decades of hard work.