MSNBC’s “Expert” Needs More Education About Reverse Mortgages

image Earlier this week, MSNBC sat down with TODAY financial editor Jean Chatzky and CNBC’s Carmen Wong Ulrich to discuss investment ideas for retirees.  During the segment, a viewer asks about a reverse mortgage for her mother.  Below is a copy of the transcript which covers reverse mortgages.  

Q: Hi, we’ve been partly funding my mother’s rent in a close-by senior apartment with her dwindling savings while waiting for her home to sell back down south. It isn’t moving in this market and we are not allowed to rent her home. Would it be wise to take a reverse mortgage, equity loan or some other type loan until it sells?Bonnie, Brighton, N.Y.

Carmen Wong Ulrich:  Stay away from reverse mortgages unless you need it as a last resort. Reverse mortgages work by basically taking out the equity in your home — selling back what you own in the home — however, reverse mortgages in particular are packed with fees that can lose you up to 20 percent of your equity. If you’re really feeling hardship, take out a HELOC, home equity line of credit, instead. It can be a tax deduction for her as well and all you pay is the interest and maybe small administration fees. However, HELOC rates are adjustable and rates will go up eventually, so be mindful of that and keep a cushion to protect you from a ballooning monthly bill.

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It’s clear from Ulrich’s answer she doesn’t understand reverse mortgages since her mother couldn’t get a reverse mortgage since the home isn’t her primary residence.  Not to mention the fact that she thinks reverse mortgage fees can “lose you up to 20 percent of your equity”. 

Ulrich’s show on CNBC is actually pretty good, but the fact that she thinks someone who is feeling hardship can qualify for a HELOC means she isn’t talking to many bankers.  To view the video click the link below.

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  • Does anyone understand that these people don’t have alternatives? I’m so sick of CNBC putting this information out. Don’t they realize that the predatory lending came from the LO’s that put these people into pay option arms when they should have been put into a reverse to begin with. What about looking at the TALC numbers?

  • what make an expert? easy to say go get an equity loan or even a reverse mortgage. she probaly can qualify for either one. second people should only take out what they nees and be prepared to make payments to a savings account to have equity.

    How much do they pay for a regular loan more than a reverse when they add the monthly intrest.

  • It’s a shame that there are too many idiots–oops-I mean “experts” giving out financial advice to the public who have absolutely no clue of what they are speaking about! These “experts” should be required to attend continuing education courses before they are allowed to discuss financial products.

    Seniors have benefited Greatly from Reverse Mtges–they have truly been a Life Saver!

  • I live by the saying, “Everyday is a School Day”.
    There was a letter to the editor in one of my local newspapers and a reverse mortgage business owner wanted to clear up a recent article and was blasted for what another reader said was this guy attempting to get free advertising.

    The general public view of reverse mortgages is so distorted and those not in the know, are the ones who need to live by my motto and learn how a reverse mortgage option can work for them.

    I see it (reverse mortgage) as not a last option but perhaps the only option a senior or boomer has.

  • I’ve said it before: If Members of the RM Family
    are not telling their success stories of helping financially struggling Seniors with a RM, somebody
    else will talk about you and it may not be what one wants to hear. Like many, many , many Americans through refinancing, I have used my growing home equity to help raise a Family of four when expenses
    exceeded income. In addition to helping other Seniors, at 70 I continue to work to make a substancial house payment. I married a Luthern Minister’s Daughter who exclaimed when we bought the
    place in Bellevue, Wa , she was only leaving feet first. Hell, I would sell the place in a minute just
    to end the monthly payment. Do I have a Reverse Mortgage. NO. Up until the most recent increase in County Limits I didn’t qualify ( home was bought in 1972 for $40,000; now worth $650,000 or more) because of loan to County Limit Value. Am I going to get one now. YOU BET. What’s left after my wife or I die (Last Survivor which will probably be her, since I married a Child–8 years difference), the Children can have. My mortgage is so high we will have little Line of Credit available but just stopping the house payment is a damn blessing. I’v had a heart by-pass, a cardiac arrest last year, and everyone who knows or works with me says at times
    I’m a geniune Ass-Whole, but fiercely honest: When Old Nelse tells you something, you can believe it. (Unless some son of a bitch lies to me– but it dosn’t take me long to find out). I don’t have Alsheimers but like most Seniors, I’m just not as mentally or physically as sharp or quick as I used to be. AND MY STORY IS NO DIFFERENT THAN MOST SENIORS. I tell this real story to help you young people understand how some (MOST?) Seniors think. When so called experts start shooting off their mouth about the disasterous pitfalls of a Reverse Mortgage, they do a dis-service to this Country’s Seniors who are scared to death about making the wrong decision with what may be their last sizable asset (especially after the Wall Street Boys have destroyed their Stock retiremenmt plan). Reverse Mortgage Folks must emphatically tell the merits of their story to the general public with
    honesty, pride, and conviction. with

  • I’m also tired of hearing that the financed start up costs run from 4% to 8% of the home’s value. The start up costs on a home valued over $625,500 are “approximately” 3.3573%, and I can’t remembe rever doing a reverse mortgage where they went above 4%.

  • Talking heads, the drive by media, make themselve targets for criticsm when they spew comments that they have not checked for accuracy. A last resort no longer and with the regulations in place there is not a 20% bite into there equity to establlish the account, and there has never been that deep of an expense. It cost less to establish an Reverse Mortgage then to sell a seniors home, there is no monthly payment like a HELOC and the remaining equity is the home owner and it can not be taken away if a payment is missed, since no payments are required. In the case at hand, occupancy would be the issue that needs to be addressed. It would not matter if there was $0.00 zero dollar cost if the home is not the seniors residence. Lets get the facts staight…

  • As if we aren’t terrified enough ALREADY as we are still considering a RM, comments like this are made from so called experts. Who can we believe?? Our situation is, I’m 68 with no-so-good health but my wife is not yet 60, therefore, if I should die after we take out a RM, she would have to sell and fast, OK understood. Also, we have waterfront property but in an area where the comps for appraisal purposes are all over the map so needless to say, we’re very concerned about getting a good appraisal. I would very much like to know your opinions regarding this and who the most trustworthy lenders are? Is it MORE risky to use someone local if they should develop an “interest” themselves in such a prime piece of waterfront?? My wife is terrified of getting RM and I need to somehow calm her fears and mine as well as a RM seems to be the last resort. We are planning to use the funds for home improvement and then sell but a HELOC is out of the question due to my lower income (SS). And selling it without improvements we don’t feel is an option. Any good advice would be greatly appreciated.

  • I forgot to ask this in my post above, but one of our most important questions given the circumstances (improving to sell) is HOW we should take the funds? one lump sum, LOC & monthly or?? We are aware of the substantial loan costs upfront but there no other options. We intend on doing $100K in improvements and then hopefully the property will sell within a year and we can pay off the RM with the proceeds.

  • To, C J, I hope you are talking to an Expert. Note, not everyone selling a RM is looking out for you. Pick an advisor who has more then a year in the business and represents a well established bank/financial institution. Ask for references… Trust but verify…

  • CJ. Think about using the Credit Line Option. This way interest is not being addded to the loan balance till the last possible billing cycle. Also check with your lender to see how adding you wife to the title will affect the loan. Trust but verify.

  • CJ, I’ll give you honest answers: If I don’t know
    the answer, I find someone who does. I work in 46
    States. Sometimes I only answer questions. Sometimes I don’t make a dime; sometimes I do. My phone number is 1-800-482-5790 (It rings in my Office Home–it’s the Class of “57” still going like 90.) I would be happy to work with you; if you perfer to work with someone locally, I’ll reccomend someone.

  • James, a little touchy aren’t you? Do you kiss your wife with that mouth? I don’t think your profanity laced tirade will inspire CJ to seek out your “honest” input about a reverse mortgage. I second wealthone’s comment.

  • I find the language used by some on this site to be deeply offensive, highly immature, wholly inappropriate and absolutely unncessary. I hope the administrators will take action to prevent such foul language from being used here in the future and urge all advertisers to place pressure on them to do so. This type of discourse just serves to cheapen the image of our whole industry. We have enough problems with the perception of the reverse mortgage business without displaying ourselves as being a bunch of foul-mouthed lunatics on a publicly available forum such as this.

  • You fancy dan Washington D.C Elites are sensitive about
    “Words”. We Seniors are damnm tired of the mortgage industry only being interested in how much money the
    Industry can make off homeowners, especially Seniors.
    When is the last time Peter Bell you personally helped a real Senior save or stay in his home? I suspect The only thing you’re interested in is “protecting” the Industry. The economic disaster this Country is facing has its roots in the Mortgage Industry and Investment Bankers who were only interested in how much money they could make. Some of you are “offended” by a couple of words used in public life nowdays–I’m offended by the terrible , percarious financial situation the mortgage Industry has helped put this great nation in.

  • Damn,this stuff stinks.I am a one finger typist and after a half hour I hit submit -lost 500 words and number 19 showed up 1 lousey sentence.
    Just a little of what was sent to outter space.

    STOP calling this process that filthy dirthy word-“reverse mortgage”
    Call it what it is a “Home Equity Conversion Mortgage”
    That other word is as stupid and filthy as “bailout”
    Words that do not disclose the true meaning of what is meant to accomplish.
    How about the real benefits to a Home Equity Conversion Mortgage instead of “lender of last resort”
    How about “A PROFITABLE BUSINESS PLAN TO END THE HOUSING CRISIS” instead of a bailout plan

    Get a free copy Request a free copy from bestsolutionsfl@aol.com just promise you will either change it,challenge it or endorse it by sending it to others and posting it anywhere you can,
    “The Everybody Wins Plan”

  • Mr. Bell and the Cynic,

    While I am sure both of your comments are well intended, it is important to see the current knowledge and ideas that many RM originators hold regarding HECMs. A free flow and exchange of ideas is important. Other websites pretend to be like Reverse Mortgage Daily offering comments, etc. but when you use them, few allow anything critical of the article writers to appear.

    Mr. Bell, not everyone values NRMLA the way many of us do. Some employers will not join NRMLA for various reasons. This is sad but a fact. Our industry would be in much poorer condition without NRMLA. It is ridiculous that those who benefit so much will not financially contribute. We would be a much stronger industry if more of those who complain about NRMLA would financially support it. Please keep up the good work.

    Many get their help and insights into the RM industry from this website. Will throttling this website help NRMLA or the loan originators who are employed at the offices of correspondents who refuse to join NRMLA? It is the information on this website and the comments of such RM leaders as you and Mr. DeMarkey that let originators see the real value of belonging to an organization like NRMLA.

    You are right; loan originators should avoid vulgar and reprehensible language. Your criticism needs to be heeded; I hope it will be. Even though I am nothing more than a contributing author, it is good to read your comments and insights. Your words and ideas are very much appreciated.

    I wonder if those you violate a basic code of conduct should have their comments monitored. Some websites do that. Delay on all comments would stifle; selective delay and approval of the comments of those who violate seems appropriate. I will ask Admin to consider such a policy.

  • Mr. Bell,

    The first part of the first sentence of the last paragraph should have read:

    I wonder if those who violate a basic code…

  • To Mr. Ken Dubois
    & Mr. James Nelson:

    I thank you SO MUCH for your consideration and taking the time to respond to my posts. I do apologize as I certainly had no intention of getting a firestorm started and was unaware it was inapropriate to ask questions in this forum. Mr. Nelson, I just may take you up on your offer as you sound as though you are as fed up as I am with the way Seniors are treated in this great country of ours. Seems the offenders forget that one day they too will be elderly.

    WEALTHONE, regarding your unnecessary comment, people helping people is great food for the soul…You should try it sometime!

  • C.J.: Good luck with you search for a solution to you Home Equity Conversion Mortgage questions. Thank you for you comments. If I can be of any assistance call me. 866-723-6033. “Trust but Verify.”

  • Let me once again reiterate what I think is “obscene”:
    A mortgage Industry and their fellow travelers, The
    Wall Street Investment Bankers, who have damn near economicly destroyed The United States of America
    (along with many other Countries who purchased the sliced and diced debt); Families who have lost their
    homes when Variable Interest Rate loan payments doubled; Jobs shipped Overseas because of so called “free Trade” policies; Wall Street Bankers given hundreds of Billions of Taxpayer Dollars, only to see them pay exorbitant salaries and bonuses to executives and employees who didn’t deserve a Dime; A war and draft dodging President and Vice President who
    took this Country to war in Iraq when it was unnecessary, causing the death of thousands of good American Men and Women and perhaps hundreds of thousands of Iraq’s Citizens (Many of those Washington D.C elites don’t mind sending other people’s Children to war, but they won’t go themselves or send their own.); and, finally,– although I could go on and on–People who only work with FHA HECMs because of the “BIG” money now that the Sub-prime Mortgage Industry has disappeared. If the writer called himself “Helping Seniors thru FHA HECMs” or just “Helping Seniors”, the comment would not have upset me. But, “Wealthone”: Come on, I suspect what’s important to that person. As far as being restricted from openly speaking my mind, forget it. I don’t NEED to blog. I do because I know many of the things one reads, sees, or hears (ESPECIALLY coming from Peter Bell’s– Another Lobbyist– Hometown of Washington, D.C.) may not really be the truth. And,REMEMBER, the two words I used (AND MEANT) were used in the U.S. Senate by Vice President Chaney
    (admired by many in Peter Bell’s Hometown).

  • Ladies and Gentlemen: As a proud Senior, I want you all to know you can have this Blog. I was willing to wear the uniform of the United States Military to defend the Constitution and this great Country: You better all read the First Admendment. This blog isn’t
    exactly The Christian Science Monitor, which I read
    daily and have for years. I have a Son who has served
    in Afgahnistan for one full year where he put his life on the line daily, flying 576 hours of what the US Army
    calls “combat time” (He is now in Kuwait awaiting transfer to a US Marine Base in Iraq for a year, his second tour). Some of you perhaps can make the same claim, some not–some are only interested in how much money one can make and consider Military Service for fools. Thanks to the policies of the Reagen
    Administration on down The United States has become a Nation of a decimated middle class. Loose regulation of Wall Street Bankers and such thieves as Bernie
    Madeoff has financially davastated America’s Seniors,
    many of whom never for one moment thought an FHA HECM would ever be necessary. What was important about this blog was not what some fat-cat Lobbyist in Washinton D.C. has to say about FHA HECM programs but
    what one could learn about helping Seniors from real People actually working with Seniors to save or keep them in their homes. I wish you all well and, by the way, try to help a Senior today, please.

  • Thank God & Good Luck! This blog is about Reverse Mortgages and how we can help seniors. That was until these ridiculous tirades!
    You need to find another BLOG because this has nothing to do with serving in the military or reading the christian science monitor!

  • To THE CRITIC:
    “Thank goodness, a HECM is still a loan of last resort; you got that wrong. But it is ALSO much more.”

    YES, “A LOAN OF LAST RESORT NO LONGER,” YOU GOT IT RIGHT, IT IS SO MUCH MORE.

    A LIMIT ON AN AMOUNT THAT CAN BE CHARGER AS AN ORIGINATION FEE, SEEMS TO BE CLEAR TO SOME OF THE FAITHFULL WE ARE BEING TOLD WHAT WE CAN CHARGE AND WHAT WE CAN’T, IS THAT A MEANS TO REGULATE? O.F. IS A PERCENT OF THE APPRAISED VALUE,OR THE LENDING LIMIT…, you BROUGHT UP EQUITY IN RELATION TO COST. WE ALL CAN DO THE MATH THE TRUE COST IS JUST THAT.

    NOW TELL US ALL WHAT IS A NON-RECOURSE LOAN, IS A FORWARD MORTGAGE OR A HELOC TRADITIONALY A NON-RECOURSE LOAN? THAT WOULD BE THE DESTINATION OF MY JOURNY.

    YOU HAVE MADE YOUR POINT AND “EVERY DAY IS A SCHOOL DAY.”

    THANK YOU FOR THE LECTURE. SMART DOES NOT EXCUSE ATTITUDE…

    TRUST BUT VERIFY…

  • Oh Mr. Critic, who is Peter Bell–your Brother-in-law?
    It’s alright that the Washinton D.C. Lobbyist makes his comments about me but I can’t react to him because he’s from Washinton, D.C. and some so called “Big-Wig”. Nonsense. He’s just like a lot of other Washington D.C. people who make their living off the backs of the hard working men and women across America. As far as politics goes, I don’t give a damn about politics. I care about about the condition of the US Government and how it treats its
    Citizens, Seniors as well as all others.

  • The Critic,

    True to your name. Can you answer one simple question?
    What do you do for a living?

    My journey is to have spell check instlled in my finger tips and help as many people the Lord gives me the opportunity to serve…

  • My Dear Mr. The Critic.

    My Lord sees all and he is foregiving. All any of us can do is our best. You will have success just remember this is a relationship business, we are not selling widgets…

  • My Dear Mr. The Critic.

    My Lord sees all and he is forgiving. All any of us can do is our best. You will have success just remember this is a relationship business, we are not selling widgets…

  • To the Critic:

    I agree. Character does count and it does not trump knowledge. Knowledge without scruples is not good either. No finger pointing here. I agree…

    Have a good life…

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