More accurate information about reverse mortgages is becoming widely available, forcing myths – such as, “The bank takes possession of the deed” – to the sideline. Information about reverse mortgages also has begun to spread through referrals and word-of-mouth, increasing confidence that they are a legitimate solution for cash-strapped seniors looking for a way to stay in their homes.
According to Judith O. Smith, a Fort Worth, Texas lender, reverse mortgages in the past have gotten a bad reputation because of their complexity, exemplified by nearly twice as many documents to sign at the closing table, compared with forward mortgages. “And, the amortization schedule can be very intimidating to potential borrowers,” says Smith, noting that “if people are not expecting this, or it is not clearly explained, it can be a real deterrent.”
Prior to offering reverse mortgages, Smith had spent decades making traditional, forward mortgages. She was contacted by a former employer interested in closing his business and coming to work with her and learning about reverse mortgages. “As someone whom I trust and respect, when he told me that he was interested in reverse mortgages, I knew it was something I needed to learn more about,” says Smith. So, together they attended workshops and seminars and eventually became more confident in the ability to identify potential problems and opportunities.
Today, Smith’s firm closes between 25 and 30 reverse mortgages per month and as many as 10 of those might have come through a referral, she says.