The fox continues to guard the hen house. There should be an article on how many seniors took AARP's advice to wait before getting a reverse mortgage, and now do not qualify because of falling home values. Thanks to AARP's deceptive "advice", many retirees are no longer able to count on home equity.

As a reverse mortgage rep and a senior with a reverse mortgage I don't trust AARP or Mr. "ambassador" Jonathan Pond! They speak out of both sides of their mouth. The supposed high cost of HECM loans is really no more than refiing your current loan on any FHA program. Both require the payment of a mortgage insurance premium upfront. Most mortgage bankers will tell you some of the best programs out there right now are FHA insured HUD products. 82% of reverse mortgages are paid off when the seniors pass away. Closing costs are really paid upon death. Who cares what I have to pay once I'm in my coffin!

It is a fact: When a Senior dies, the value of one's home equity isn't going with him/her. There really are only two choices: One, leave the asset for heirs
or, two, use some of your home equity (that you've worked your whole life to accumulate) to financially ease the burden of one's last years. Simple choice, once explained. By the way, may I recommend to RMD
readers to read "Outrage! The $5.2 Trillion Question: Who Reaaly killed Fannie and Freddie?" by Bethany Mclean in the current (February) issue of Vanity Fair. The article is illuminating, sad, and almost
unbelievable.

What a bunch of holier than thou BS. AARP makes money selling senior citizens overpriced insurance. They are nothing but a glorified insurance agency and rank right up there with ACORN as being altruistic.

Before admonishing AARP, let’s revisit the problem.

It seems seniors are not being adequately “counseled” or educated on the concerns the AARP “Ambassador” expresses. So here is the dilemma: why is that?

If memory serves correctly, wasn’t AARP instrumentally involved in the establishment of the standards for the information that is to be promulgated at counseling? If that is correct, why isn’t the ambassador directing his efforts to improve counseling information standards and by those improvements help seniors better understand and be better prepared for the complications to which he alludes? It seems this is more of an internal AARP problem than anything else, although the “Ambassador” is to be commended for calling this to our attention. Yes, there are complications to a HECM reverse mortgage but it seems the “Ambassador” gave no suggestion on how to address them with seniors.

What is most troubling about these kinds of comments is how they undermine the potential of a reverse mortgage by declaring them to be “loans of last resort”. So many “important” financial gurus really do not understand how reverse mortgages can be used to reduce the interest rates on many business loans, credit card debt, and other “toxic” debts of seniors and their heirs. Further especially in business settings, other costs could be cut such as the costs of outside accountants reporting on the company’s financial statements, or inspections by factors and other creditor requirements that cost money and many times as importantly, time. Loans of last resort? Well, yes but that is hardly all they are.

As to the well meaning “regulators”, don’t they have better things to do with their time? How wide spread is the abuse they refer to in relation to the number of reverse mortgages originated in total, or any specific time period? With all of the need for loan modifications – are they really so robustly looking into “the tricks” played on seniors? Well, how about the modification ripoffs and inappropriate denials on reasonable offers, going on right now? Are the problems with reverse mortgages really as rampant as the comments of the interviewees seem to make them? Here is another group of regulators who do not want to bear responsibility for correcting the mess into which they helped so many of us (including seniors) get. Why aren’t investigating the oft’ used phrase – “liars’ loans” and who was responsible for the down grading of underwriting standards? Why aren't they seeking ways to prevent Alt-A and SubPrime loan fiascos in the future? It seems reverse mortgages are far enough removed from the incredible current mortgage fiasco, that these regulators can investigate reverse mortgages without having a strong dose of the "guilties".

Just look at Mary Schapiro, the nominated SEC Chairwoman. While she was the chief “regulator” at FINRA she spent time and energy warning about the improper use of reverse mortgage proceeds. All the while Bernie Madoff (pronounced like “made off with seniors’ pension and investment monies”) was under her purview. Why was Mary so concerned with reverse mortgages? Maybe it was because her members were involved in some of the annuity scandals associated with reverse mortgages? That was one devious deflection; now she is attempting another by being appointed to head up the SEC. Where is Mary now in the midst of the Madoff scandal? Maybe looking for other Madoffs she failed to regulate? Doubtful!!! It seems we will be replacing a regulator who was asleep at the switch, Chairman Cox, for one who sees her chief function as advising on those activities outside her purview but which deflect any responsibility for losses for which her members might have been responsible. 16 years ago the concern was about Zoe Baird, now it is about Mary Schapiro. With Zoe it was selective compliance leading to selective enforcement. Now it is selective oversight, leading others to selective compliance.