Reverse mortgages are becoming more and more popular with retired home owners due to their nest eggs being so negatively affected by the chaos on Wall Street. A reverse mortgage can help by supplementing their income by using the equity in their home.

Bank of America should know that I had to walk away from a reverse mortgage that was about to close April 20th because of $7,000.00 in additional charges. In the mortgage business this is looked on as “The Squeeze” which, in my opinion, places Bank of America in competition with other loan shark businesses.

Thankfully, my bank also writes reverse mortgages, and I look forward to closing with an additional $5,000.00 capital and without additional charges.

Something is wrong with management in Bank of America. Loan shark practices will eventually ruin a business’s reputation, and again will result in additional TARP money…at tax payers’ expense.

BofA called today. Says that the numbers I was told about 50% fall out is way off and that the actual number is more like 25% or less, but that an actual number to use and quote was “proprietary”….so, my sources say one thing and BofA rep says another, you decide! (I’m not sure that one out of four loans lost to appraisals in Florida is anything to crow about, but I guess it’s better than half) regardless, the bank model, regardless of the bank, having reps guess and hope is flawed in my opinion, being a former Gorilla employee!

Appraisals are a real issue. I have found that you have to be brutally honest upfront. Homeowners are emotionally attached to their homes and I’m finding in most instances they believe their home is valued much higher than it is in reality.

I would rather lose the loan upfront than go through the whole application process and lose it after the appraisal comes in low.

It must be especially tough in Florida.

Hi,

Yes I agree with Treverse and other that the numbers doesn't seems to be realistic and it would be good if appropriate or referenced enumeration is provided. $7,000.00 is a big amount…..there are several other banks too…what about them?

Treverse, you took a real insight for the issue for appraisals and being honest

- J

The $7000 is probably easily explained if the bank they used did not utilize the FHA insured HECM program. Remember there are banks that originate their own “reverse mortgage”. If the value of the home was $350k, then that will solve the question immediately.rnrnJust hope the borrower never winds up underwater on that house, because that $7000 might have been worth it.rnrnOtherwise, an inexperienced broker could have overestimated for taxes (i.e. in NY the mortgage/tax stamps are often left in the GFE automated by the banking software, even thought they should not be charged).