Jeff Lewis Talks Reverse Mortgages with Fox Business

NewImage.jpgGeneration Mortgage Chairman, Jeff Lewis sat down for an interview with Fox Business to discuss reverse mortgages.

While they may not be for everyone, they’re undergoing a “renaissance” and possible worth a look says Fox.

“One of the most interesting aspects of this product is that it seems that people go through a lot of difficulty to actually do it, and then once they do it they are ecstatic,” said Lewis.  “They may have read some misleading or misinformation from different sources that give them a little bit of pause, and they are often told to only do this when they have nowhere else to turn. I think it is a little unfair for the product to be characterized as an instrument of last resort. The fact of the matter is there is a lot to the product.”

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Check out the interview at the link below.

Reverse Mortgages Gain Popularity Among Baby Boomers

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  • The article did not draw out the attributes Mr. Lewis so readily displays on camera. An interview format in print does not appear to provide a platform at which he excels. Of course one must realize that in this medium his message is filtered not just by the writer but also by editors.
    As one of the few industry leaders who participated on the HUD committee creating Savers, it was disappointing that the article did not cover Savers.
    Mr. Lewis should not have been drawn into deliberating on tax matters. While he shows partial mastery of the “tax-free” income issue, his comments on the deduction of accrued interest was very, very marginal, if not misleading. The problem with the savings account illustration is that the act of pulling out the cash that was deposited by the owner of the cash is never taxable when the owner pulls that same cash back out. Pulling cash out through a loan can always become potentially taxable to the extent it is not paid back.
    While one can hardly blame Mr. Lewis for plugging his own company, it is not characteristic of his normal modus operandi and seemed a little out of place in the dialogue.

  • In the article, the writer used the common phrase: “own the property or have a small balance.” This language is very insightful. The conjunction “or” shows it is either one condition or the other. The phrase in quotations seems to imply that if there is any debt on the property, the homeowners have less ownership in the home. It does not imply the true characteristic and nature of a mortgage and lien and that is to create a security interest in the home.
    The interesting thing is that most mortgage agreements and liens have no impact on the ownership rights of homeowners. They do place title restrictions regarding transfers and can lead to conveyance of ownership to the lender as provided in the mortgage and lien agreements primarily related to failure to comply with loan covenants.
    We present schedules showing homeowners how the equity in their home changes over time with a reverse mortgage. Our presentation and at times failure to clearly define these terms in context promotes the idea that something is happening to their ownership interests in the home. Many times at the end of presenting the amortization schedule I have heard even trainers declare that at the point where projected equity goes negative: “… at this point, the borrower will no longer have equity in the home.” Despite the calculated equity going negative, nothing happens to the ownership interests of the homeowner. Many times this last sentence is not made clear to seniors.
    InvestorWords.com starts out definiing equity as: “Ownership interest in a corporation in the form of common stock or preferred stock. It also refers to total assets minus total liabilities….” Notice its first emphasis is on ownership not the equation.
    Sometimes we wonder where the idea “the bank owns the house” comes from. It comes in part in how mortgages are described and the unfortunate overuse of the word equity. While most seniors have no problem with the mathematical concept of equity, they sometimes think we are using equity to describe both the calculated amount AND ownership interests when we are only referring to the calculated amount. It is important we emphasize what we mean by such terms as equity when we use them. This word is an example of the confusing words we sometimes use.

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