Journalist Calls Out McCaskill on Her Reverse Mortgage Crusade

image When it comes to the mainstream media, I’d say our industry has three well established journalists who provide fair and balanced reporting when it comes to reverse mortgages.  One of those is Newsday columnist Saul Friedman, who tells his readers Don’t Worry, Reverse Mortgages are Safe.

In his Gray Matters column, he writes that “to hear Sen. Claire McCaskill talk about federally insured reverse mortgages, you’d think the popular program is riddled with fraud and victimizing older Americans and costing the government billions.”

Friedman says not to worry, reverse mortgages are safe and so is the 20-year-old program that has insured such loans for more than 500,000 older homeowners, including 112,000 last year.

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Despite recommendations from the government, AARP, Kiplinger, and others, McCaskill continues her crusade to clean up what she called a “program that is leaving our seniors vulnerable to predatory practices leading to fraud and victimization.”

Our industry is certainly aware that there are some problems but government auditors have found scant evidence of fraud in the market for the HECM.  Friedman asked   McCaskill’s office to provide him with evidence but was only given the witnesses at her hearing where several suggested that the lucrative reverse mortgage market was becoming a target for deceptive advertising but no cases of fraud were cited in the HECM program.

Our industry was well represented by NRMLA Peter Bell at the hearing who said that after polling state law enforcement officials, “no one has identified any incidence of widespread malfeasance specifically in reverse mortgage cases.”

I can’t speak for everyone but “Thank You Saul Friedman”.  The fact that someone from outside our industry is calling out McCaskill means that people are listening and hopefully she will stop the crusade and work with HUD and NRMLA to protect seniors without harming the very people who need the product.

Don’t Worry, Reverse Mortgages are Safe (Newsday)

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  • Admin,

    Thanks for the great article. It is good to see a reporter who is not cowed by the unsubstantiated fear tactics of a U.S. Senator. How does she represent the “Show me” state?

    The Senator creates mistrust for the sake of her own political gain. While there are problems with the HECM program, she does not come to the table to provide solutions other than an apparent propensity to terminate it.

    Mr. Friedman, thank you for informing seniors that the program is not ready to collapse under its own weight.

  • Sen. McCaskill Got a Hot reception from the Anti-ObamaCare Crowd as well the other day at a “Town Meeting” I saw on TV. She seemed to have a problem answering the question about not taking the time to read the previous Bail-out Bill, yet spent her time trying to talk down to the Citizen Attendees instead of answering their questions.

    • It could be the senator would like “pax romana” which involved peace throughout the empire provided by law, enforcers, and taxation. Of course, opposition meant complete devestation — loss of land, liberty, family, life.

      And, as the critic said “it is good to see to see a reporter who is not cowed by the unsubstantiated fear tactics of a U.S. Senator.” Thanks, Mr. Friedman, for doing the fourth estate proud!

  • Although Sen. McCaskill has her hands full right now with health care issues hopefully she will do her homework and really get the facts on the HECM program
    and back up her statements with fact instead of innuendo.

  • Senator Claire McCaskill is typical of a vast majority of our elected officials who are simply uninformed, iladvised, and apathetic to their constituents. They are qick to criticize others, but can't take criticism. It's a shame when Senators have so little respect for the very people they are supposed to represent. 2010 THROW THE BUMS OUT !!!!

  • Admin,

    Thanks for putting this story on the main header. In my opinion you should repeat it a couple more times. And thanks to Mr. Friedman for giving reassurance to our seniors that the Reverse Mortgage is not the evil loan program out their to prey on the senior population.

    Sen. McCaskill should have a live question and answer session with one of us professionals in the industry. This might be what is needed to straighten out all the misconceptions that are being created by people like the senator. I am putting out a formal invitation to Sen. McCaskill to a formal live debate. This invitation is being offered through The Reverse Mortgage Daily Post. I can be reached at 866-400-2487 or at john.aaxareverse@gmail.com.

    Have a good day,

    John A. Smaldone

  • But…the program is not safe, by any means. Proposals written about in these pages describe how both the House and the Senate want to reduce the benefits under the program. At the same time, they are looking at ways to increase the insurance premium. So what you have is an already low Loan-to-Value loan which will provide less and cost more. THIS is the threat that needs to be covered by the MSM, that Congress is going to pay for its gross excesses by milking old people.

  • Getting the word out,

    Thanks Saul for getting the right words out. Maybe we should bring some of our senior clients to Washington to let Senator McCaskill see and hear how a reverse mortgage has benefited and improved the lives of our seniors.

  • I really don't believe we accomplish anything by launching personal attacks at elected officials or anyone else with whom we disagree. Those who engage in personal attacks do our cause a great disservice.

    We in the reverse mortgage industry are (or should be, unless our heads are in the sand) aware of instances in which senior homeowners have been taken advantage of by bad actors who put their own financial interests ahead of those of the the seniors. I am aware of several, and some of those scam artists continue with apparent impunity to this day.

    It's a difficult problem because most of the scams involving reverse mortgages also involve the selling of other, inappropriate financial products such as deferred annuities. Mortgage lenders are regulated by HUD/FHA, and most insurance companies are regulated by state insurance commissioners. So far, there has been no coordination of enforcement among the various regulatory agencies.

    Industry trade associations, such as NRMLA, do not entirely prohibit their members from cross-selling other financial products. Because the leadership of these organizations are controlled by executives of diverse financial-services firms (which acquired reverse mortgage companies precisely because of the cross-selling opportunities that resulted), they prohibit “unethical” cross-selling to reverse mortgage customers, but advocate “ethical” cross-selling. The NRMLA ethics advisory on “ethical” cross-selling is so full of holes that any member firm can begin soliciting customers practically before the ink is dry on the reverse mortgage contract. It requires that the product “provide a bona fide advantage” to the customer. How does one define “bona fide advantage?”

    Abuses continue to this day at the small firm level as well. According to the September 2009 issue of Consumer Reports, one San Diego reverse mortgage company recruits insurance agents to market loans, trying to convince them to buy a “Reverse Mortgage Success Training Kit.”

  • I would appreciate hearing feedback on the following. In a June 30th article Jim Salter, of the Associated Press includes the following:

    “In fact, because the loans are federally guaranteed, reverse mortgages are costing taxpayers millions of dollars, McCaskill said.”

    According to the HUD website: “FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing.”

    I think this is a very important that deserves clarity.

    Any feedback?

  • I would appreciate hearing feedback on the following. In a June 30th article Jim Salter, of the Associated Press includes the following:rnrn”In fact, because the loans are federally guaranteed, reverse mortgages are costing taxpayers millions of dollars, McCaskill said.”rnrnAccording to the HUD website: “FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing.”rnrnI think this is a very important that deserves clarity.rnrnAny feedback? rnrn

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