Wow, was I ever disappointed with two of the articles cited. Both involved information provided by a self proclaimed retirement expert who is also a reverse mortgage lender.

Both are loaded with industry clichés and have little substance or insight. We, as an industry, already have way too many nonsensical clichés that are inherently wrong, especially in our current economic situation.

For example, one article says: “A reverse mortgage operates in the reverse fashion of a traditional or forward mortgage in that under a forward mortgage you have a falling debt, rising equity loan as the borrower pays payments and repays the principal.” First the author obviously forgot about the value of the home in describing equity. If value is dropping faster than the traditional loan is being paid down, is equity actually rising?

The author goes on to say: “The reverse mortgage is a falling equity, rising debt mortgage in that the borrower receives payments from their home….” Does the author realize that not all RM borrowers receive “payments”? Second, how do payments come “from the home”? This is a debt and the payments come from a lender. Third, just a few years ago, home values were rising faster in parts of the country than reverse mortgage liabilities were growing; so how in this case was equity falling? Still to this day some homeowners find that the total increase in value exceeds the total increases in the reverse mortgage that replaced their forward mortgages. Finally, I guess the author has no knowledge that some seniors make monthly payments even though none are required.

There is more but space does not permit more “ranting”. We need the level of information provided by “experts” to add to the understanding of our products not repeat the misstatements formed in the days when these products were first introduced, especially when that “information” comes from one of our own. Let’s uplift the level of information and not turn to the nonsense of the past.