Reverse Mortgages: Taxpayers on Hook for Billions of Dollars Every Year

[Plinker]

Taxpayers On Hook For Billions Of Dollars Every Year

This from the Heritage Foundation: 2017

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

I was stunned when I read this. This is a fact a salesman will never reveal.

[dewilson58]

Four years old..................the world has changed.

History can be shocking........Slavery, Indians forced off their land, Women not able to vote.

[manaboutown]

Taxpayers On Hook For Billions Of Dollars Every Year

This from the Heritage Foundation: 2017

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

I was stunned when I read this. This is a fact a salesman will never reveal.

It is likely much, much more by now. It takes time to acquire and process data like this and may take three or four years.

Thank you for posting this. If it saves even one gullible Villager from jumping off the reverse mortgage financial cliff your post will have been worthwhile.

I found that the bleeding of taxpayers due to reverse mortgages going bad continues.

"HUD: Reverse mortgages continue drain on FHA insurance fund
Subsidy rate holds steady in Q2 as program becomes more burdensome for FHA"

From a June 7, 2019 publication: HUD: Reverse mortgages continue drain on FHA insurance fund - HousingWire (https://www.housingwire.com/articles/49292-hud-reverse-mortgages-continue-drain-on-fha-insurance-fund/)

[EdFNJ]

As I wrote in a similar thread here a few days ago (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/15-000-floridians-reverse-mortgages-facing-foreclosure-homelessness-315515/) a RM was a godsend for my father who passed away 3 years ago at 93. FANNIE has owned it since he passed but he made out like a bandit.

My father had a RM and it was the best thing that could have happened for him. He died at age 93, had pulled out well over $90,000 on a condo worth $50K with his RM and after he passed the bank could do what they want with it. So far it has sat empty and foreclosed upon for 3+ years in 90 degree south Florida heat and must be rotting away from mold inside. No way he could have continued to live there without it. When he applied for the RM they appraised his little condo for $180,000 when they were selling for $50-60K.

He was a WWII & Korea Navy Vet so the Feds (and by default taxpayers) owed him.

[manaboutown]

As I wrote in a similar thread here a few days ago (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/15-000-floridians-reverse-mortgages-facing-foreclosure-homelessness-315515/) a RM was a godsend for my father who passed away 3 years ago at 93. FANNIE has owned it since he passed but he made out like a bandit.



He was a WWII & Korea Navy Vet so the Feds (and by default taxpayers) owed him.

Well whoopeedo. Many taxpayers are vets and get screwed by picking up the tabs on RMs that go bad.

[EdFNJ]

Well whoopeedo. Many taxpayers are vets and get screwed by picking up the tabs on RMs that go bad. It didn't "go bad" he did. He DIED. The terms of the RM were it "pays for life or until the last person leaves the home or is deceased." He died, they paid, and per the terms of the RM they owned the home and for that they gave him scarlet fever and from that CHF. If they didn't want to accept that it shouldn't have been offered. And thank for your 6 years of service in 2 wars too. Whoopdeedo.

[Don5154]

Taxpayers On Hook For Billions Of Dollars Every Year

This from the Heritage Foundation: 2017

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

I was stunned when I read this. This is a fact a salesman will never reveal.

Interesting information. Funny, a few weeks ago there was a TV’er on Talk of The Villages who was pushing RM’s to soliciting his business.

[Bay Kid]

Interesting information. Funny, a few weeks ago there was a TV’er on Talk of The Villages who was pushing RM’s to soliciting his business.

I believe there is an advertiser, Mr. Hancock, that is pushing hard for RMs over the past months. Check his post today.

[dewilson58]

I believe there is an advertiser, Mr. Hancock, that is pushing hard for RMs over the past months. Check his post today.
Not sure he is "pushing hard"............as I read, the RM is just one of his products and he is trying to off-set some of the negative, one-sided, posts. IMO. Have a Good One.

[DIY&Save]

It didn't "go bad" he did. He DIED. The terms of the RM were it "pays for life or until the last person leaves the home or is deceased." He died, they paid, and per the terms of the RM they owned the home and for that they gave him scarlet fever and from that CHF. If they didn't want to accept that it shouldn't have been offered. And thank for your 6 years of service in 2 wars too. Whoopdeedo.

Perhaps, in this case, “going bad” is defined as when the outstanding loan amount exceeds the value of the home. When this happens, the taxpayers pay billions to the lender. I don’t believe it was meant as disrespect for your father. I believe the point of this thread is to ask why, we as taxpayers, and not the lender, should be responsible? Seems like a very reasonable question. Certainly not acknowledged by the salesman.

[airstreamingypsy]

Mr Hancock is a sponsor of TOTV so he has the right to push his business, just as you have the right not to get a reverse mortgage.

[retiredguy123]

Mr Hancock is a sponsor of TOTV so he has the right to push his business, just as you have the right not to get a reverse mortgage.
I agree. But, when a sponsor creates multiple threads on an open forum, he should expect to get comments and discussion about the pros and cons of the information he posts.

[Stu from NYC]

I agree. But, when a sponsor creates multiple threads on an open forum, he should expect to get comments and discussion about the pros and cons of the information he posts.

He is ok with you doing it apparently as long as you do not comment on his threads. Than they either get ridiculed or taken down by him.

[manaboutown]

It didn't "go bad" he did. He DIED. The terms of the RM were it "pays for life or until the last person leaves the home or is deceased." He died, they paid, and per the terms of the RM they owned the home and for that they gave him scarlet fever and from that CHF. If they didn't want to accept that it shouldn't have been offered. And thank for your 6 years of service in 2 wars too. Whoopdeedo.

Although we do not have all the facts most likely his RM had nothing to do with his service for which we are all certainly grateful. I am glad he survived his service. One of my uncles did not as his plane was shot down bombing Germany. Another was shot down over China flying The Hump; other uncles and aunts in the US services survived WWII, as did your father, thankfully. My father survived both WWI and the Spanish Flu while in the army and also lived to age 93. My point is the lender did not lose on the risk it took on lending on your father's property. It knew it could not lose as the we taxpayers would pick up the tab - and we did.

[charlieo1126@gmail.com]

As I wrote in a similar thread here a few days ago (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/15-000-floridians-reverse-mortgages-facing-foreclosure-homelessness-315515/) a RM was a godsend for my father who passed away 3 years ago at 93. FANNIE has owned it since he passed but he made out like a bandit.



He was a WWII & Korea Navy Vet so the Feds (and by default taxpayers) owed him. during war both military and civilian,followed by many more trouble spots around the world , taxpayers and feds owe me nothing but what I was payed

[almondz]

That is old information. They completely did away with the old reverse mortgage program and revised/revamped reverse mortgage product so that could no longer occur.

[EdFNJ]

during war both military and civilian,followed by many more trouble spots around the world , taxpayers and feds owe me nothing but what I was payed They owed him. HE probably didn't feel that way but I DO. Same reason vets get (and deserve) discounts at stores and restaurants and medical for life etc etc. They are owed that for their service and deserve it. If the "taxpayers" don't like it so be it.

[manaboutown]

That is old information. They completely did away with the old reverse mortgage program and revised/revamped reverse mortgage product so that could no longer occur.

Oh, it is still occurring. HUD: Reverse mortgages continue drain on FHA insurance fund - HousingWire (https://www.housingwire.com/articles/49292-hud-reverse-mortgages-continue-drain-on-fha-insurance-fund/)

[nick demis]

Taxpayers On Hook For Billions Of Dollars Every Year

This from the Heritage Foundation: 2017

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

I was stunned when I read this. This is a fact a salesman will never reveal.

Does that mean that the government is paying out $14 billion or they are on the hook for $14 billion? Insurance companies are on the hook for every penny they insure everyone for but the only pay out a miniscule portion of that amount. I don't know what the true facts are but am skeptical when I hear incomplete information.

[nick demis]

during war both military and civilian,followed by many more trouble spots around the world , taxpayers and feds owe me nothing but what I was payed

Agreed, especially for vets and their families, but the problem is those that are getting freebees that they do not deserve

[Frank Giardino]

There is a house a few doors down from me, that has sat empty for over three years, we heard that the person that owned it and died took a RM. Can't imagine the house will be worth much with no A/C or heat for this long. Probably got his RM thru the Gov?

[jimjamuser]

during war both military and civilian,followed by many more trouble spots around the world , taxpayers and feds owe me nothing but what I was payed
America felt they owed veterans long term health care - so, the V.A. was established. The military vets deserve that benefit and more!

[jimjamuser]

They owed him. HE probably didn't feel that way but I DO. Same reason vets get (and deserve) discounts at stores and restaurants and medical for life etc etc. They are owed that for their service and deserve it. If the "taxpayers" don't like it so be it.
Throughout history when counties lose ONE war, they may become permanently enslaved. The same is TRUE today. The main purpose of Federal Government is to protect its citizens. The military ensures that protection. The military uses many troops that are of a young age - their most productive age - and pays them very little to start. They DESERVE all the discounts, health care, and other fringe benefits that they get. They deserve to leave service with pride and have their GRATEFUL country love them.

[jimjamuser]

That is old information. They completely did away with the old reverse mortgage program and revised/revamped reverse mortgage product so that could no longer occur.
If that is correct, it would be the best post so far.

[manaboutown]

Does that mean that the government is paying out $14 billion or they are on the hook for $14 billion? Insurance companies are on the hook for every penny they insure everyone for but the only pay out a miniscule portion of that amount. I don't know what the true facts are but am skeptical when I hear incomplete information.


Paying out.

[manaboutown]

There is a house a few doors down from me, that has sat empty for over three years, we heard that the person that owned it and died took a RM. Can't imagine the house will be worth much with no A/C or heat for this long. Probably got his RM thru the Gov?

There are far too many of these situations all around.

[charlieo1126@gmail.com]

America felt they owed veterans long term health care - so, the V.A. was established. The military vets deserve that benefit and more! was owed you for your care , the constant whine about stores that don’t give you a discount or waiting in a long line for a free meal in a restaurant you may not even go to I find pathetic , I would rather see discounts for single mothers or all low income people veterans included and as far as pay goes with bonuses , combat pay , speciality pay the young soldiers do very well and remember just like me they wanted to be there , the more risk you take the more elite the unit the more money you make

[stebooo]

It just never ends. Incompetency

[Topspinmo]

Four years old..................the world has changed.

History can be shocking........Slavery, Indians forced off their land, Women not able to vote.

So why bring up stuff 100 plus years old? How bout going back 1000 years or when the Big Bang happen?

[bpascani]

celebrities are as well, on public tv advertising (I just can't remember the names..the main one is a guy). I believe my cousin had a reverse mortgage for a few years before she died. She put her house on the market in the last several months of her life, and it sold the Friday before she died on 2 or 3 days later. I don't think she lost out on anything. I don't know how the RM got handled at closing either.

[JimJohnson]

As I wrote in a similar thread here a few days ago (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/15-000-floridians-reverse-mortgages-facing-foreclosure-homelessness-315515/) a RM was a godsend for my father who passed away 3 years ago at 93. FANNIE has owned it since he passed but he made out like a bandit.



He was a WWII & Korea Navy Vet so the Feds (and by default taxpayers) owed him.

TRUE! There are many reasons and people that benefit from reverse mortgage. Some just want to say hurtful lies.

[Tom2172]

This is financial musical chairs - when the government incompetence music stops!
Who ever is left will be left with massive federal debt that can’t be paid off!
America is bankrupt now it will only it worse before the total collapse

[MandoMan]

Taxpayers On Hook For Billions Of Dollars Every Year

This from the Heritage Foundation: 2017

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

I was stunned when I read this. This is a fact a salesman will never reveal.

At the same time, The Heritage Foundation is opposed to federal regulations that might keep private insurers from harming the gullible. I believe in Consumer Protection because insurance companies hide so much. If the FHA program is losing money, change the fee system so it breaks even. Just like Social Security, Medicare, Medicaid, other federal support systems, charges for driver’s licenses and passports. Adjust the fees. If private insurers can do better, let them. The private student loan market has made tons of money for investors, but it has been very tough on students and families.

[Plinker]

The following are DIRECT QUOTES from the commission-based salesman who advertises on ToTV concerning the topic of taxpayers losing billions of dollars from reports dated 2018 and 2019.

From Jan 21, 2021 @ 5:50 pm:

“Bottom line, the insurance fund has never been healthier based on the sweeping reforms that have been made to the HECM program over the last 7+ years.”
“So, the program is in good shape today, the taxpayers today are not on the limb for the deficits, and borrowers 99% of the time have plenty of equity in their home when they sell it or pass away.”

Questions to ask concerning honesty and transparency:
1) If 99% of RM’s leave plenty of equity then why are taxpayers paying billions of dollars each year to keep the program afloat?
2) Why does he refuse to acknowledge that he has been proven categorically wrong with regard to the above quotes despite current figures from very reputable sources?

Do you believe what a used-car salesman tells you?
Do you believe what an annuity salesman tells you?
Why would you believe everything a commission-based reverse mortgage salesman tells you?
Clearly, you should not!

Contact a fiduciary, financial planner and explore all of the various options, including reverse mortgages, before you take advice from a salesman.
You are talking about a huge financial move that will have forever-lasting consequences.

[charlieo1126@gmail.com]

If it is not wasn’t for the ads there would be no talk of villages do you think someone does all this for free