Comments on: Consumer Reports Puts Reverse Mortgages On Its List of Financial Scams, Why?

By: Mr Reverse

Mr Reverse — Sat, 14 Feb 2009 15:25:20 +0000

In responce to Consumer reports. There maybe some bad apples out there selling reverse mortgages to people who don’t need to borrow money. Costs may be high but you can blame it on greedy states collecting tax money not on loan amounts but 150% on an expected loan amount which might not be reached.We are making the counsling industry rich with the $125.00 charge. Mip insurance on the value of the home at 2% making our insurance fund rich. except it probly is used to bail out foreclosures on the forward side on the backs of seniors. The banks now have higher margins earning more money when loan is paid off.. We are the lowest in the equations since we are limted to the max of 6000. We stil have banks selling insurance products as Met life agents have told me they are being trained to recognise seniors who take out a reverse mortgage to be able to solicit them andmother insurance companies who are now in the ball game. We need a rule that the procedes can not be used for insurance porducts unles proven it’s good for our
seniors. As far as benifits being lost because of seniors taking a reverse mortgage it is not true. You can still recive Medicaid while having a reverse mortgage. and if a senior has money why should states give them money to fix their home as consumer feels they are losing out. Grants can be subordinate and do not have to be paid off if borrower has one.
More important is if a senior facing a foreclosuer and is rescued there is no reason why they can not save some of the mortgage payments for the future. So a family member maybe able to buy thier own home in the future. We as dedicate Reverse mortgage orginators we should be helping our borrwers to be more informed and protected of them. Where was Consumer report when borrowers were being scamed with the intrested only loans and homes they were buying and could not afford them.Where was the scam reporters???. Why must every thing be geared for family but not for the parent who is growing older and needs help now.

By: Mr Reverse

Mr Reverse — Sat, 14 Feb 2009 15:24:39 +0000

By: Linda Lewis

Linda Lewis — Thu, 12 Feb 2009 07:03:17 +0000

Mr. Bell – thank you for your response and the helpful information you have provide on an ongoing basis.

Regarding the concern of the adult protection professionals about seniors who get a Reverse Mortgage and waste their funds and/or have no equity left in their home: I must reiterate David White’s comment again and ask again: How are they worse off with a Reverse Mortgage than if they had refinanced and taken out equity or taken out a HELOC? At least they would not risk foreclosure and loss of their home.

By: Peter Bell

Peter Bell — Wed, 11 Feb 2009 14:08:28 +0000

For those who ask to whom letters should be sent, they should just be addressed “To the Editor” and sent to Consumer Reports. I don’t have the information at my fingertips right now, but our staff just got the email and physical address from their website and/or from a copy of the magazine.

If you do send letters, and once again, I do encourage people to send well-written, thoughtful letters pointing out inaccuracies in the article, please send copies of your letter to us at NRMLA, as well.

Also, in drafting your letters, please be sure to recognize the differences with material misstatements of fact versus opinions that might be different than your own. It is okay to dispute opinions and bolster your arguments with examples of good situations where reverse mortgages have helped homeowners, but a writer is still entitled to his or her own opinion based on the research they have done. They are not entitled to spread information that is factually incorrect.

Finally, the idea that a reverse mortgage should only be used as a means of last resort is a widely-held notion. Many senior advocates, financial planners and adult protective services professionals feel this way. We try to educate opinion-makers that this is not necessarily so, but those who think that way are entitled to their opinion.

The concern of the adult protection professionals is that they see many seniors who get a reverse mortgage in their earlier years and spend money unwisely. Then, later on, when their needs increase, they are broke and destitute, lose the house and become wards of the state. If they has sold the house earlier and moved into some other type of lving arrangement, rather than incur the fees and interest costs on a reverse mortgage, their funds might have held out longer. This is not neccessarily an unreasonable concern.

By: Brad

Brad — Tue, 10 Feb 2009 23:59:12 +0000

To Peter- do have a contact name and e-mai address for the appropriate person to reach out to at CR?

By: Peter Bell

Peter Bell — Tue, 10 Feb 2009 23:55:00 +0000

NRMLA sent a letter to the editor at Consumer Reports as soon as we saw this article when it first came out over a week or so ago. This is “standard operating procedure” for us, to respond to press reports that we feel mischaracterize reverse mortgages. We do not distribute our letters to editors for a number of reasons, a primary one being that it is a common courtesy to give editors time to look into the piece being protested and figure out if they want to print a correction, retraction, our letter or another piece from us.

I would also encourage members of the industry to write to them individually, as well. If anyone decides to do so, it is important that your letter be polite, respectful and stick to pointing out factual inaccuracies in their report. It would also be useful to have borrowers send letters explaining that their reverse mortgage has been valuable to them and that they received helpful assistance from both their loan officer and reverse mortgage counselor.

By: Linda Lewis

Linda Lewis — Tue, 10 Feb 2009 22:05:12 +0000

So many great comments and suggestions. Hooray for David White! Someone please publish an article about banks who gave seniors high interest HELOCs who are now faced with foreclosure; how these people may have been saved by getting a RM instead. And is there any way to get CR to publish a retraction? How about a ten-second commercial from HUD or FHA that simply says “A Reverse Mortgage is a government-regulated program, not a scam!”

By: Micheal

Micheal — Tue, 10 Feb 2009 21:59:11 +0000

Apparently the person(s) writing the article got off mission. It appears they attempted to grade some of the marketing efforts of FF. Then to offer a judgemental type opinion without the facts. Where is the hands-on factual basic comparisons of the product(s) itself? Where and when did they complete a non-bias survey of the recipients of the product? I did not see any writer interviewing HUD/FHA about this government insured and endorsed product with all the consumer safeguards attached.

Unfortunate for CR and I suspect many of us; we now have to suspiciously view this consumer “Bible” as well… as just an opinion based on ?????? And as we in the heart and soul of this great opportunity to change lives for the better; this unfounded article will hurt those it should be helping the most…our most precious seniors.