AARP “Ambassador” Offers Advice On Reverse Mortgages
January 11th, 2009 | by admin Published in News, Reverse Mortgage | 4 Comments
Over the weekend, the Los Angeles Times published an article describing how retirees are no longer counting on home equity to get themselves through retirement. Faced with falling home values and a struggling economy, many Americans are changing their retirement plans and looking at new options.
Retirees no longer counting on home equity covers a range of topics including downsizing their home, selling assets, postponing retirement by working longer and signing up for a reverse mortgage. Each option has its challenges and risks.
Two of the options the author considers risky are reverse mortgages and selling life insurance policies. Quoting experts such as AARP financial "ambassador" Jonathan Pond, who says reverse mortgages should be something of a last resort due to the high fees and complicated nature of the loans.
The article does stress that education is key because of fears that reverse mortgage complexities could be used to trick seniors, but fails to mention that The Housing and Economic Recovery Act includes provisions to help address this concern.
However, it does say that the American Assn. of Residential Mortgage Regulators and the Conference of State Bank Supervisors established guidelines earlier this year to review lenders and brokers selling reverse mortgages. The guidelines are meant to guard consumers against fraud and abuse, "such as the simultaneous sale of unsuitable investments or deceptive sales practices," according to a December news release from the groups.
- Related Posts
- Forbes says Avoid Reverse Mortgages
- ABC News Financing Retirement: Reverse Mortgages
- Less than 25% Plan to Use Home Equity to Finance Retirement says Study
blog comments powered by Disqus .
January 12th, 2009 at 8:59 am (#)
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.
January 12th, 2009 at 9:50 am (#)
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!
January 12th, 2009 at 11:16 am (#)
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.
January 12th, 2009 at 1:07 pm (#)
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.