Reverse Mortgage Media Coverage Continues on Morning Shows

Reverse mortgages continue to be a hot topic in the mainstream media ever since the Office of the Comptroller of the Currency’s John Dugan expressed his concern about reverse mortgages at the American Bankers Association’s Regulatory Compliance Conference.  Earlier this week, the coverage continued with both the CBS Early Show and NBC’s Today Show airing segments on reverse mortgages.

During the CBS segment, Julie Chen spoke with Vera Gibbons about when it’s a good idea to use a reverse mortgage.  Despite being called a Loan of Last Resort, it was pretty positive.

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On NBC, Ann Curry speaks with real estate agent Barbara Corcoran  who shares tips for people considering a reverse mortgage in these tough economic times.  I’d say that this one was less positive than CBS due to Ms. Corcoran’s statement:

It’s very expensive on the front end, it used to be a total ripoff that lenders were doing to older people.  Today, its been limited by the federal government as to how much of a ripoff it can be.     

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I understand these type of segments are never going to be perfect and even with a few negative comments from people, I still think it’s good for the industry because it increases awareness.  What do you think? 

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  • I thought the second piece was much more positive. Despite Barbara Corcoran’s opinions and mistakes, she does make a case for RM’s in certain situations. Vera Gibbons and Ann Curry end the segment impying that it is unbelievanle that so many people are taking these “loans of last resort.” They shoudl give equal time to people in the industry.

  • It’s interesting to me that all of the “experts” given a voice to opine on television and in the press are typically not in the reverse mortgage industry. Most appear to have only watched the previous RM segment aired on CNN or CBS as there is an amazing similarity in their responses. I know a few real estate brokers, as I are one, and while most will admit to having heard of a reverse mortgage, none would be able to offer even a limited explanation of how they work.

    The observation that the “federal government” limits the amount of the “ripoff” is a case in point, considering that FHA deducts twice as much money from the homeowners equity for a potential insurance claim than the lender who does all the work.

    Also unheard from are any of the thousands of seniors whoses lives have improved as a direct result of this program. I guess it’s not newsworthy to hear the truth from someone who has actually gone through the process and has a direct experience with the effect of a RM.

  • Amazing isn’t it that the best news for the networks and media to propigate is BAD news?! They always put the negative spin on reverse mortgages rather than empahsizing the positive aspects of these great loans. The only positives in these two interviews is that it is a saving grace for seniors who have lost much of their savings, investments or income in this lousy economy. They mistakenly indicate that the heirs are out of luck, more negative and untruthful infomation and that it is the loan of last resort. We know it can be for some but for many others reverse mortgages are the safety net they need just to reassure themselves that they will always have a financial resource to draw on if they use it frugally and wisely. The biggest negative hook they use of course is the “expensive” routine even thought most seniors do not want to move from their homes and do plan on spending their remaining days in their present home, thus amortizing the costs over many years, which can lower the costs to about 4-5% rather than 10%. Get real media, quite the negative spinning, it is scaring the hell out of many seniors needlessly.

  • Well, I’ve heard plenty of you whining on here about how evil insurance is, when all you’ve seen on it is negative news boradcasts. Annuities, bad.

    Literally, trillions of dollars worth of them sold, all by sleazy insurance agents — but if a negative story shows up in the news you bozos eat a story like that up. Yes, the millions upon millions of people who bought annuities did it because they are stupid, sure. And, no, I don’t sell insuarance. I spend my days talking to reverse mortgage originators, I’ve probably spoken to a thousand of you, so I can honestly aver that at least 90 percent of you are complete idiots.

    OF COURSE what’s on television is crap. It is fed to the masses of drooling imbeciles that is the American public. What’s funny is the people on this board think they know better. The best way to become a reverse mortgage salesperson is to flunk an intelligence test.

  • Hey Like Duh,

    Give me a call and we will see who’s an idiot. Anyone who flaps their gums over some self construed idea that they have talked to enough of any group of people to make a determination that 90% of the overall group are idiots, must be an IDIOT himself LOL.

    Anyway.. if you want to discuss RM’s as part of a financial plan for a senior and /or their family than call me. If you are just looking to be a typewriter tough guy(as I would suspect from your IDIOT comment)than please dont bother me or any one of my RM colleagues, we have enough going on that we don’t need to deal with idiots like you.

    Mark
    718-705-8556

  • Hey Like Duh,

    Give me a call and we will see who’s an idiot. Anyone who flaps their gums over some self construed idea that they have talked to enough of any group of people to make a determination that 90% of the overall group are idiots, must be an IDIOT himself LOL.

    Anyway.. if you want to discuss RM’s as part of a financial plan for a senior and /or their family than call me. If you are just looking to be a typewriter tough guy(as I would suspect from your IDIOT comment)than please dont bother me or any one of my RM colleagues, we have enough going on that we don’t need to deal with idiots like you.

    Mark
    718-705-8556

  • Like Duh,

    I don’t have a problem with insurance or annuities and they certainly have their place. I don’t see them villified on national network morning shows. Remember, even Claire McKaskill in her committee meeting regarding annuities sold with reverse mortgages attacked the reverse mortgages.

    The reason is insurance sales(annuities in particular)are state regulated and reverse mortgages are regulated by FHA and HUD, and numerous other federal agencies, along with having the reverse mortgage loan originators, in California at least, as the accountable parties in any transaction where insurance products are sold (regardless of when and with whom the senior intends to purchase an annuity). And we make a significantly less money on the sale of the reverse mortgage as opposed to what the annuity salesmen makes to have that additional exposure.

    Since I do not agree that reverse mortgages are “the loan of last resort” but can be a valuable financial tool to a senior who has specific financial needs and goals, I resent the picture presented by Dugan and by the so called “experts” on the morning shows. Why don’t they come to our talking heads? Why wasn’t Peter Bell interviewed? Why are our views considered suspect while the network so-called expert talking heads who present no credentials that prove they have any business giving advice about reverse mortgages to the public are allowed by shoddy, lazy reporters to represent who we are to the public? That is what I resent.

  • Having been in both industries, considering the low bar to entry, there are probably 5 sleazy make a quick buck, turn a tick loan officers for every counterpart in the insurance industry. Loan officers don’t even need to have E & O insurance which says a lot about the degree of accountablity they are held to. The whole “buying insurance” issue is a non-issue.

  • You guys are easy! Falling into “Like Duh’s” B.S. He or she is obviously looking for attention. I think we should just ignore the children who rely on name calling and get on with our business.

  • I do currently hold a California real estate broker’s license and I know other RM salespersons with state real estate licenses at risk to any state policing action. The SAFE Act insures that we will be mortgage sales licensed and tracked in all states by 2010. We will, by California state law, still be the only party accountable where insurance is sold in conjunction with a reverse mortgage, regardless of whether or not we are a party to that insurance sale, and we will have mortgage sales licenses on the line. Your representation that our integrity could be a non-issue is self-serving.

  • Like, Duh

    You may have dropped out of this thread, but I am still curious about what you talk to the originators about. I know you are probably just blowing off steam, like some of the posters above, but if you are part of the financial services industry, perhaps we can all learn something of value. I think most of us are trying to help our clients (expect for the crooks, of course) and make a living. So if we can all drop the idiot word, and you have a legitimate point, I for one, would like to hear it.

  • I love how she states that if your going to leave your home to your heirs this is NOT the loan for you. Its disguesting that they allow uneducated people that have zero knowledge of the reverse mortgage industry educate the public. “Last Resort Loans” really nice.

  • Regarding Ms. Corcoran’s statement…”It’s very expensive on the front end, it used to be a total ripoff that lenders were doing to older people. Today, its been limited by the federal government as to how much of a ripoff it can be.”
    The legislation that now governs the HECM reverse mortgages,(pretty much all that are done) was first inacted by Congress in 1988. Someone should tell her that the consumer protections have been in place for 20 years!

  • In seems that the R.M. industry itself is the biggest perpetuator of the “expensive” myth. If you take a HUD-1 from a Forward and a Reverse mortage and analyze them the close cost are not that different. We have allowed the RM to be branded as expensive so people perceive it so.

  • Have any of the RM critics who are so “knowledgeable” EVER checked to compare the closing costs of a RM and a regular FHA guaranteed forward mortgage loan?
    Hell, they’re the same.
    And with the squeeze on lending more and more FHA loans are being closed.
    Therefore, what’s the “big front end cost” issue.
    This guy calling us idiots is obviously a couple sandwiches shy of a full picnic.

  • I find it funny that a real estate agent would use the term ripoff. Is charging someone 6% of their sales price to dig a hole, place a sign and type a few lines on the MLS not a ripoff? Her cluelessness is evident in the fact that she states the government is somehow responsible for making it “less” of a ripoff. Last time I checked, they did not lower the PMI while lowering the origination. How many lenders got the PMI? HMMM!

  • The thing that irks me is that they talk about the other “options” as being better (selling or renting)or the high cost of the HECM.

    In our part of the country selling your home will cost about 8% of the sales price to sell a home. On a $200,000 home that is $16,000, but the HECM only cost my borrwer $9592 and she doesn’t have to move. On a $440,000 home the cost to sell would be $35,200 but the HECM cost was $17,599.20, and again there is no expense of moving or using proceeds to live elsewhere.

    Renting the home….How is that a better option? The rental income would need to pay for their housing expense elsewhere. Could a person rent for less than they can rent their out their home? If there is a mortgage on the house how would they ever come out ahead.

    I also shake my head when they talk about the total costs and fees “over the life of the loan” being so high. When was the last time they looked at a TIL on a forward mortgage? Doesn’t that total life-of-loan cost just take your breath away!!!

    Perhaps the counsleors, since they are to talk about the suitability of a HECM, should start giving the seniors a cost comparison of their options; Cost of selling versus TIL on forward refi versus HECM over 15 years.

    Comparing the options of selling, refinancing and reverse mortgage are a bit like comparing apples, oranges and bananas. These are all fruits but totally differnt. The others are all optiosn but totally differnt outcomes.

    There is a cost for everyhting in life. It comes down to simply deciding if the cost is worth the benefit and if you are willing to pay that cost.

  • It is actually prefered that you have your Real Estate Sales License in CA to sell RM’s and I know of no guildline that says you cannot sell real estate or any other real estate product.

  • dduck,

    From the amount of posts I see from you, you spend your days trolling the forums. You may learn more if you actually tried to originate some loans.

    As to dropping the “idiot” word, sure I’m game. How about I refer to your ilk as “drooling retards?”

    And, it’s none of your business what function I serve in the industry, and it’s not about “getting better.”

    I know from several years of jamming icepicks into my eyes in frustration at the idiocy of my clientele, that your industry is a seething mass of dumb.

    FF Reverse,

    “Anyone who flaps their gums over some self construed idea that they have talked to enough of any group of people to make a determination that 90% of the overall group are idiots, must be an IDIOT himself”

    — Thank you for proving my point, FF Reverse. A central theme of statistical analysis is that with enough observations you can make a reasonable analysis as to the makeup of a group as a whole. It’s called the “Central Limit Theorem.” Google it, you uneducated chimpanzee.

  • I think its time we as an industry (through NRMLA) approached a major network news magazine such as 60 Minutes, 20/20 or Dateline about airing a balanced, objective and first hand view of reverse mortgages. The piece should include the history of reverse mortgages and interview people who have been originating reverse mortgages from day one. The story should interview peole in the government (passed and present) who are directly involved with reverses such as Meg Burns or maybe Brian Montgomery former FHA Commisioner who disclosed to us last Fall that he had recommended a reverse mortgage for his own mother.The story should interview passed clients who have benefited from having a reverse mortgage preferably one of the 93% from the AARP story who have stated that they are satisfied or completely satisfied with their reverse mortgage and would recommend it to others. Finally, with full knowledge that any news organization would want to air both sides of the story, Peter Bell could speak to the issues of high costs, inappropriate marketing and rare occurances where a reverse mortgage borrowers were encourgaed to use their loan proceeds to purchase inappropriate investments and how the our own trade association has been working diligently to pass recent federal legislation that limits origination fees and prohibits cross selling of investments products. Not to mention that NRMLA requires all of its members to sign a pledge requiring the highest ethical standards and has removed members for not following that pledge.

    On the heels of Commissioner Duggans comments, I believe the time might be right to do this. If we do not put out a positive story or at least a balanced story about reverse mortgages, who will?

  • Treverse

    You were right, I was wrong, thinking we are all adults on this forum.

    like, duh

    By the way, I am not afraid to say that I am a retired insurance/securities person, and do not sell RMs or any other real estate product. Too many posts? Perhaps, I will be glad to slow down or stop, all it would take is one word from admin or one of the more intelligent posters on this forum.

  • Bill White:

    I agree that we should approach the networks perhaps with a prepared presentation featuring a balanced view of reverse mortgages and how they work. Peter Bell, can we do this and is this the time and if not when?

  • Good day,

    The publicity is really something., some of the video was good, especially the second one. Here we are, doing all we can to improve the quality of life for seniors and we have to listen to those who don’t have a clue.

    If the news media really wants to know about our industry, they should go with one of us to take an application.

    We are not an industry for a last resort loan! A reverse Mortgage is for the needy or the affluent. What about the senior who owns a home free and clear and is about to buy a $150,000 motor home? A reverse mortgage could be a great way to buy the motor home, not have a payment on it or the reverse mortgage that gave the senior the money to buy it.

    Now tell me, that senior just wound up winning the lottery. It was like the motor home was given to the senior. Don’t tell me that senior did not just improve their way of life.

    We need equal media time. I would love to have the debate with one of these so called experts that compare us to the sub-prime industry or like it was said in the video, a reverse mortgage is a last resort means. I know I would have a ball debating with them and so would all of you who are reading my comment.

    We do need NRMLA or even AARP to come out and fight to get us on the networks, let us, the experts answer questions and tell the audiences of true life experiences.

    Take the woman I saved from foreclosure, Lorraine Zickefoose. What a reverse mortgage did for her was the salvation for her life. I guess you would call that a last resort for her. Great, she was lucky our industry was their to be her last resort. The Government would not have helped her.

    Some how we need to be the one’s in front of the camera’s. We are the only one’s qualified to be their. If our story can be told the way it needs to be told, seniors and others a like may start understanding the truth. I know I am sick and tired of all the so called experts bashing our industry and I know you are too. We have done more good for our seniors than any other lending program and a good share of Government program aids for seniors. I am not talking about social security, Medicare and programs of that nature.

    I can go on and on but it would only be getting my frustration out. I want to do something about all of this. We need to shut off the bad publicity, quickly. Our industry is going down the tubes, we can’t let this happen. Everyone have a good weekend.

    Best,

    John A. Smaldone

  • This has been an interesting thread.

    I have one question. Why do some of the folks that post things on here act so immaturely? What’s the purpose of calling each other names and being so insulting? Can’t we just engage in intellectual discourse — without stooping to the level of a bunch name-calling kids or teen-agers.

    I would urge John Yedinak and his colleagues to institute some rules of civility and require all posters to abide by them. Having the kind of crude, crass remarks made here makes our industry look like a bunch of morons. In fact, I have had staffers on Capitol Hill, folks at state attorney general offices and federal regulators who occasionally visit this site tell me that after reading things here, it confirms their concern that there are people with a few screws loose engaged in this business and that they should be even more strident about protecting consumers.

    So, please, for those who this comment is aimed at, please grow up and act like an adult. We’re only shooting ourselves in the feet with the kind of nasty, negative, vitriolic remarks on here.

    Admin, are you ready to step up to the plate and post some guidelines for appropriate behavior on here? Or are you going to let the useful service that this blog can be to the RM business be diminished by a few coarse, angry folks?

    • Peter Bell,

      I agree that name calling can be counter-productive. Being a web based baby, I am innately resistant to censorship. I like the new method of reporting comments that are mean and uncalled for. Self policing may work in wild wild west of the web.

      I still would like to know if Bill White's idea of less reactive and more proactive interface with reporters like those posted above could help change the bias that currently exists.

      What do you think, Peter?

  • Peter Bell,

    I applaud your position. I share your comments and I to feel the immaturity displayed by some in the name bashing is uncalled for. Not only uncalled for but those doing it are only degrading the Reverse Mortgage Daily Post.

    It is people like the one's we are referring to that feed those that are trying to compare our industry to the sub-prime industry or an industry of last resort.

    I stand beside Peter in asking the Admin to step up to the plate and impose guidelines for appropriate behavior. It is sad when we have to be treated like children. If this is what is needed, so be it.

    John A. Smaldone

  • Mr. Bell,

    Before I start, I just wanted to compliment you and all those involved in the Policy Conference. It was everything NRMLA said about it and in my meager opinion, much more and I was not able to be at nearly all of the events. I will not steal your thunder but it was a great job.

    Your comments are greatly appreciated and should be heeded by all. Your criticism of this thread is on point. There is little doubt that some comments made on this website do tarnish the image of the reverse mortgage industry in the minds of many including some to whom you represent NRMLA and its members. However, isn’t that part of the price for having a place where news is released and ideas are being freely exchanged?

    Like you, I own no financial or other interests in this website nor am I compensated directly or indirectly for comments or other writing. Before last week, the total time I have spoken with admin is probably much, much less than you. We met face-to-face for the first time last Wednesday night.

    Comments from people like you, Joe DeMarkey, Shannon Hicks, Atare Agbamu, John Smaldone, Lance Jackson, John Lunde, Dennis Haber, Abel Torres, and so many others uplift this website. It would be that much better if we also heard from Bart Johnson, Liz Scholz, Darryl Hicks, Sarah Hulbert, Shawna James, Diane Coats, John Nixon, David Peskin, John Lucas, Tony Garcia, Dean Jones, Roger Reynolds, Monte Rose, and from the many who make this industry better.

    But then who can forget all of the originators who write daily so concerned about our industry or people like dduck who is concerned and engaged even though he has no direct involvement. It is good people are passionate on how RMs really solve people’s problems. It is sad some turn this website into excuses for attacking others including you. (Of course then some people believe that if their ideas are questioned, they are under personal attack. There is a balance.)

    I would love to know what foreigners who read our Congressional Record and Federal Register think of our country. Yet I would hate to see these publications more edited than they are right now. Thoughts of some of this country’s finest minds are expressed in them daily. On the other hand some of the worst thoughts and ideas in the history of this country can be found in them as well.

    While I am not as tolerant towards the commentators as admin, I greatly appreciate his tolerance. At the same time I have admired your personal restraint and tolerance towards those who have personally, irrationally, and viciously struck out at you. From time to time, admin does let commentators know they have misused this website in no uncertain terms even causing some to stop commenting altogether including one who was inexcusably relentless and abusive towards you.

    By accident a few others and I discovered some improvements admin is committed to making to this website. If it was not for some problems I discovered about past comments, it would have been rolled out. It will answer some of your concerns but not all. Like you admin is extremely concerned about the misuse you describe.

    Peter, please keep up the fine work and while I agree with your call for restraint, I have much more difficulty calling for a significantly higher level of editing the comments on this website. However, as I accidently discovered, your concerns have not fallen on deaf ears.

  • Question Mark,

    All of the brokers that I have worked for allow you to work under their CFL license but ask that you get your RE License within a certain time. All give a higher sales commission to those licensed. It is not “alleged” just what I have found. The bigger point is that you can sell any RE product while originating RM's.

    Eric

    • Your experience is interesting but it appears that the real estate license preference is a specific employer preference.

      All reverse mortgage originators holding California Real Estate licenses can sell real estate, provide any reverse mortgage except one and still not be in violation of any California state law.

      You cannot, however, sell real estate in cases where a state real estate license is required and still provide HECMs to anyone. This is a HUD standard and you can verify this conclusion with NRMLA, Dan Mooney at the Santa Ana HUD HOC, or any other knowledgeable HUD employee.

      Like you I hold a California real estate license. I have been a broker for over 15 years and in the RM industry for over 5. Be careful, if you are originating HECMs (as if there is any other significant type of RM to originate right now), you and your employer are playing with fire.

      • I may be incorrect, and I would be grateful if you can prove to me that I am by pointing out where I can go to get confirmation in writing, but I am a RE broker also and believe that even using my license for a product such as Equity Key or the current similar programs which are real estate option based is not allowed if I am also selling the HECM reverse mortgage products per HUD.

  • Question Mark,rnrnAll of the brokers that I have worked for allow you to work under their CFL license but ask that you get your RE License within a certain time. All give a higher sales commission to those licensed. It is not “alleged” just what I have found. The bigger point is that you can sell any RE product while originating RM’s.rnrnEric

  • Your experience is interesting but it appears that the real estate license preference is a specific employer preference.rnrnAll reverse mortgage originators holding California Real Estate licenses can sell real estate, provide any reverse mortgage except one and still not be in violation of any California state law.rnrnYou cannot, however, sell real estate in cases where a state real estate license is required and still provide HECMs to anyone. This is a HUD standard and you can verify this conclusion with NRMLA, Dan Mooney at the Santa Ana HUD HOC, or any other knowledgeable HUD employee. rnrnLike you I hold a California real estate license. I have been a broker for over 15 years and in the RM industry for over 5. Be careful, if you are originating HECMs (as if there is any other significant type of RM to originate right now), you and your employer are playing with fire.

  • Peter Bell,rnrnI agree that name calling can be counter-productive. Being a web based baby, I am innately resistant to censorship. I like the new method of reporting comments that are mean and uncalled for. Self policing may work in the wild wild west of the web. rnrnI still would like to know if Bill White’s idea of less reactive and more proactive interface with reporters like those posted above could help change the bias that currently exists.rnrnWhat do you think, Peter?

  • I may be incorrect, and I would be grateful if you can prove to me that I am by pointing out where I can go to get confirmation in writing, but I am a RE broker also and believe that even using my license for a product such as Equity Key or the current similar programs which are real estate option based is not allowed if I am also selling the HECM reverse mortgage products per HUD.

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