[coralway]

PT Barnum was right

[dewilson58]

They lost their houses because they could not pay RE Taxes & Insurance, NOT because of a reverse mortgage. They would have lost their house without the RM and probably sooner.

[valuemkt]

Originally Posted by dewilson58

They lost their houses because they could not pay RE Taxes & Insurance, NOT because of a reverse mortgage. They would have lost their house without the RM and probably sooner.

Not sure I agree with your conclusion. All of a sudden you're "given" a pot of money .. kind of like winning the lottery. What percentage of people that win the lottery are broke within 5 years ? Look it up .. So since you have limited time left, you spend and charge to beat the Grim Reaper .. and guess what ? They beat him for a while, and outlive that Pot of Gold. Formerly responsible, but financially ignorant people no longer have any money left to pay the bills, like taxes and insurance .. QED

[dewilson58]

Originally Posted by valuemkt

Not sure I agree with your conclusion.

Not my conclusion..................it was in the article quoted. The OP just wanted to spread negative headlines.



Paul Harvey

[retiredguy123]

In addition to people with reverse mortgages, people who have VA loans with "no money down" also often lose their homes to foreclosure. Both VA mortgages and reverse mortgages are Government programs because the banks won't provide these loans without the taxpayers footing the bill when the loans go south. Banks are smart enough to know that these loans are not based on sound financial principles, so they won't risk their own money. But, they are happy to use taxpayer money to facilitate the loans. You can say that someone lost their house because they didn't pay their taxes, but that is not the fundamental reason. Financing a house properly and responsibly requires the homeowner to have "skin in the game", which these people don't have. That is the basic reason why there are so many foreclosures with the loans. Take away the Government guarantee and the mortgages will disappear, as they should. Several GAO audits have confirmed it.

[Jayhawk]

Originally Posted by Dond1959

getting some financial advice before using this product makes sense.

That is actually the LAW.

[Stu from NYC]

Originally Posted by Jayhawk

That is actually the LAW.

The question is are they giving valid financial advise explaining the negatives.

My feeling is they do not give a balanced opinion.

[manaboutown]

Originally Posted by Stu from NYC

The question is are they giving valid financial advise explaining the negatives.

My feeling is they do not give a balanced opinion.

The required counseling can merely consist of a short phone call at a cost to the borrower of $100. "Counseling" was mandated by the government as part of its attempt to reform lending practices. I do not consider the required phone call true counseling which would require an in-depth analysis by an independent well educated fully accredited professional financial planner.

[Garywt]

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.

So you took it as a lump sum and not monthly payments.

[Garywt]

Originally Posted by dewilson58

They lost their houses because they could not pay RE Taxes & Insurance, NOT because of a reverse mortgage. They would have lost their house without the RM and probably sooner.

I agree, you stop paying taxes for whatever reason your going to lose your house at some point.

[dewilson58]

Originally Posted by manaboutown

well educated fully accredited professional financial planner.

No such thing.
Never seen a billionaire financial planner........or even $100mil......maybe $10mil, but extremely rare.

[Stu from NYC]

Originally Posted by manaboutown

The required counseling can merely consist of a short phone call at a cost to the borrower of $100. "Counseling" was mandated by the government as part of its attempt to reform lending practices. I do not consider the required phone call true counseling which would require an in-depth analysis by an independent well educated fully accredited professional financial planner.

Cousin Brucie would never stand for that would he?

[Miriam2940]

I have a reverse mortgage and this article confuses me. I don’t believe a reverse mortgage adds any more debt than a regular mortgage and I don’t have monthly mortgage payments to worry about. If people’s homes are going into foreclosure it’s because they can’t pay their bills but not because of a reverse mortgage. Everyone in this country is hurting and seniors are no exception.

[Leadbone1]

Originally Posted by Plinker

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.

This is absolutely a BS post. After you do a reverse mortgage there’s only a couple ways you can lose your home. If you don’t pay your taxes and insurance on the house that is one way. Another way is if you do not make it your primary residence and live there at least six months out of the year. Otherwise you can stay in that home for the rest of your life. You also can sell the home anytime you want and pay back your loan. Any excess equity left over after your loan is paid back and still go to your family.

[noslices1]

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.

How much will you owe in 10 years? Interest is compounded daily, so your annual pay back will go up exponentially until your payback will be more than your house is worth.