We agree that reverse mortgages are an outstanding option for people who do not have long-term care insurance or sufficuent funds to pay for care. With the falling price of homes (as well as the stock market) let's hope more people start thinking and planning for this while there is still time.

For those who want to read more about when to buy long-term care insurance, how much it costs, the American Association for Long-Term Care Insurance has an excellent Consumer Information Center. http://www.aaltci.org/long-term-care-insurance

We educate and advocate ... we don't sell. Thanks.
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance
href="http://www.aaltci.org//"

Reverse mortages require that the home be your primary residence, therefore, if you cannot purchase assisted living services in your own home the loan must be paid in full. Senior Housing Co-Ops and Senior Housing condos are the only type of housing that qualify for the reverse mortgage financing.

JonScott,

In analyzing any situation of this nature one must look at many factors. For example, if the "confined" senior is married, then a reverse mortgage is possible as long as the home is the principal residence of the spouse and the home and the couple (or spouse perhaps alone if the "confined spouse is not on title or will come off of title) otherwise qualify. Without specific facts and circumstances, further comment is "foolish" speculation.

Ms. Knight's last sentence is terribly troubling. She states that some proprietary products are recourse. Is anyone aware of the product(s) to which she is referring?

This article once again displays the lack of true education we, as an industry, render. For example, what does "the value of the loan" have to do with the nonrecourse nature of a HECM? I would not be so harsh except she uses a "dowjones.com" email address and her article appears in the Personal Finance section of the WSJ. There is no reason not to hold an author from such a prestigious financial publication to a higher standard on financial concepts.

Further after Mortgagee Letter 2008-38, one can make a clear case that selling the home for less than "the amount due on the HECM" may result in the borrower or the borrower's heirs owing a balance.

For example, what would happen if the decedent's (borrower) trust sold the home for less than "95% of the appraised value of the home" -- to anyone? Again what would happen if the decedent's trust sold the home for more than the appraised value but less than the amount due -- to a trust beneficiary? Or what about the borrower selling the home for an amount equal to 95% of the appraised value to a child who is also an heir in her will when the loan balance due was much greater than the appraised value? Worse yet what would happen if the last transaction were part of a sale-leaseback transaction?

HUD Mortgagee 2008-38 may have much farther reach than most of us currently realize.

Ms. Knight's last sentence is terribly troubling. She states that some proprietary products are recourse. Is anyone aware of the product(s) to which she is referring?

This article once again displays the lack of true education we, as an industry, render. For example, what does "the value of the loan" have to do with the nonrecourse nature of a HECM? I would not be so harsh except she uses a "dowjones.com" email address and her article appears in the Personal Finance section of the WSJ. There is no reason not to hold an author from such a prestigious financial publication to a higher standard on financial concepts.

Further after Mortgagee Letter 2008-38, one can make a clear case that selling the home for less than "the amount due on the HECM" may result in the borrower or the borrower's heirs owing a balance.

For example, what would happen if the decedent's (borrower) trust sold the home for less than "95% of the appraised value of the home" -- to anyone? Again what would happen if the decedent's trust sold the home for more than the appraised value but less than the amount due -- to a trust beneficiary? Or what about the borrower selling the home for an amount equal to 95% of the appraised value to a child who is also an heir in her will when the loan balance due was much greater than the appraised value? Worse yet what would happen if the last transaction were part of a sale-leaseback transaction?

HUD Mortgagee 2008-38 may have much farther reach than most of us currently realize.