Comments on: Inspector General Concerned About Reverse Mortgage Fraud

By: Joyce Hanson

Joyce Hanson — Mon, 22 Jun 2009 17:50:03 +0000

Unfortunately we have the same dishonest loan officers who would steal from their own parents, getting into the reverse mortgage business. I have been originating reverse mortgages for 13 years and some of the stories I hear from seniors make me sick!! One of the big offenders are the online or telemarketing originators. The untruths they tell the Senior, just to get the loan is dispicable!! I think all reverse mortgage applications should be done face to face to perhaps eliminate some of this fraud.

By: Matt

Matt — Mon, 22 Jun 2009 13:32:17 +0000

Amazing, we just saw a decade of Fannie Mae and other government agency promoting sub-prime lending that filled trillions of dollars of Mortgage Backed Securities, and they are now worried about Reverse Mortgage fraud? Sounds like the the imates are running the crazy house.

By: reporter21

reporter21 — Sun, 21 Jun 2009 19:03:39 +0000

The schemes are the same that you could have on cash-out forwards.

By: dduck

dduck — Sat, 20 Jun 2009 21:12:16 +0000

Like any tool, an annuity can be used improperly, just as not everyone should use an RM.
**First of all an immediate annuity (IA)(fixed or variable) could be inappropriate if the annuitant(s) need more than the monthly payments or are afraid of insufficient funds for a long-term care situation, etc. (or, need I state it, money for the kids or grandkids). Also, last time I checked, the tenure provision would provide a HIGHER monthly payout. And, from a cash flow standpoint, tax brackets need to be checked as a portion of IA payments are taxable. (Of course, the IA has lifetime payout options and may continue paying in some situations where tenure would have stopped.)
**A deferred annuity (TDA), likewise, could “tie up” money as stated above. (Usually the liquidity is 10% per year, non-cumulative, with full access in about seven years.) Usually, this is appropriate for “extra money” where no long-term need is anticipated for the premium amount invested
**A rated IA (meaning medical underwriting) could be more appropriate in some instances, when health is an issue, and could beat tenure.
** A Reversionary Annuity (RA) is not available in all states and is used only in specific circumstances.
–Annuities are wonderful tools, just like RMs, when used properly.

By: wehavegonemad

wehavegonemad — Sat, 20 Jun 2009 16:44:26 +0000

Can anyone explain to me how you invest in an annuity in an improper way? That seems like a blanket statement with very little meat to the explanation.

Yes, I can understand keeping seniors out of variable annuities due to market risk, but the equity indexed or fixed products with good solid companies don’t do any of the things these people claim.

It is my belief and the proof is in their words, that the feds make ‘chicken little’ statements these day to get the public to allow them to increase their regulatory power.