Fox News: Reverse Mortgage Defaults Feature

Fox & Friends ran a segment yesterday on the taxes and insurance problem facing some reverse mortgage borrowers.

The video features Bob Massi, a Las Vegas attorney and Fox News legal analyst, who openly admits, “I’m not crazy about reverse mortgages.”

It gets worse, check it out below.

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    • LegacyJim,

      The problem is not just Bob; it is also us. Like many in the industry who are unfamiliar with our own legacy, you understand the current market but little more. Bob understands the historic market but most likely not the current.

      So how is Bob right? First Bob is not stupid. There is a reason why he mentioned a home worth $400K and a “bank” appraisal at $300K and then went down a road so sadly unfamiliar to far too many originators in our industry today.

      Bob was describing the equity appreciation sharing arrangement option that was available with reverse mortgages not that far back in the reverse mortgage industry past. I was not around then, just like you. Even though it is still technically available, few if any offer it because of the perceived (and in a few cases actual) notion that lenders were taking advantage of borrowers with their low ball appraisals.

      I am not a school teacher. If you want to know the industry, I suggest you read up on it. Bob is right historically but he is dead wrong currently as to that aspect.

      So whose fault is it that Bob is so wrong? Yes, he has a responsibility to know the current condition of the loan he is describing but we all know there are few of those. The problem is that we as an industry also have a responsibility to make sure that are much fewer “Bobs” in the world and on that front we have failed.

      It starts with the knowledge that these trusted advisors rely on throughout their careers. It is simply amazing how many college professors in the schools of business and law have no idea what the current structure of reverse mortgages is. The problem starts there and moves up. Who do you think an attorney trusts, you or his professors? The same is true of CPAs and CFPs.

      I have heard many in the industry brag about how they came across a trusted advisor who knew about the product and helped them sell it or got it themselves. Yet in California alone there are far more CPAs and CFPs than the total number of HECMs our industry has produced in the last two calendar years. How many originators are in California, a 1,000? How many of those understand the product well enough to be able to “educate” an attorney, CPA, or CFP about the product without getting side tracked with anecdotes? How many command the grace necessary to be considerate enough in their presentation that they do not turn off their audience with their alleged “knowledge” of the products and our industry?

      While Bob needs to take action, so do we.

      • Early in my mortgage career as a CA broker, I was approached with the opportunity to participate as an investor and as an originator in these equity sharing RM programs. I did not like them and did not sit well with me as they appeared somewhat predatory. Before folks start hurling tomatoes, this was the impression I was left with due to the way it was pitched to me. I chose to decline these invitations. I must honestly say that it left a bad taste in my mouth with regards to RM’s. Obviously, this was several years ago. I would agree with Bob if these programs were the current and prominent RM’s on the market- but to even mention FHA and be so completely off the mark on the current RM offerings is irresponsible, especially when you are a supposed expert. I am going to personally send Bob Massi an old-fashioned written correspondence; this is truly unprofessional.

      • James,

        This is a matter of degree. I do not like the old message Bob gave. It is one thing to believe what you do about Bob but it is an entirely different matter to address him in that way. Having seen things you have written I am sure you will handle your letter in a most judicious manner. I hope he takes your concern to heart.

      • Critic,

        I appreciate the vote of confidence. When Bob (or his office staff) read my letter the impression they should receive is this: I am concerned mortgage banker who was surprised that Bob, who is OBVIOUSLY an expert, did not address the current RM products on the market. I have pointed in my letter that the Saver programs retain more equity for the borrower, their heirs and has a lower MIP. I also noted in my letter that the current FHA-insured HECM’s DO allow the heirs to inherit the property and that both these previously mentioned RM products represent the predominant offerings on the market today. In other words, I am surprised that with his vast knowledge of RM’s that he chose not to address these items as well. (Or perhaps Fox did not give him the time necessary to address this and thus the resulting broadcast was not representative of all that he had hoped to convey. )

      • James,

        It looks like the approach you took had a positive impact. Your response only heightens my respect for you. I hope the others who responded were as thoughtful. I am glad his response promoted NRMLA.

      • James,

        It looks like the approach you took had a positive impact. Your response only heightens my respect for you. I hope the others who responded were as thoughtful. I am glad his response promoted NRMLA.

      • Critic,

        I appreciate the vote of confidence. When Bob (or his office staff) read my letter the impression they should receive is this: I am concerned mortgage banker who was surprised that Bob, who is OBVIOUSLY an expert, did not address the current RM products on the market. I have pointed in my letter that the Saver programs retain more equity for the borrower, their heirs and has a lower MIP. I also noted in my letter that the current FHA-insured HECM’s DO allow the heirs to inherit the property and that both these previously mentioned RM products represent the predominant offerings on the market today. In other words, I am surprised that with his vast knowledge of RM’s that he chose not to address these items as well. (Or perhaps Fox did not give him the time necessary to address this and thus the resulting broadcast was not representative of all that he had hoped to convey. )

      • James,

        This is a matter of degree. I do not like the old message Bob gave. It is one thing to believe what you do about Bob but it is an entirely different matter to address him in that way. Having seen things you have written I am sure you will handle your letter in a most judicious manner. I hope he takes your concern to heart.

      • Early in my mortgage career as a CA broker, I was approached with the opportunity to participate as an investor and as an originator in these equity sharing RM programs. I did not like them and did not sit well with me as they appeared somewhat predatory. Before folks start hurling tomatoes, this was the impression I was left with due to the way it was pitched to me. I chose to decline these invitations. I must honestly say that it left a bad taste in my mouth with regards to RM’s. Obviously, this was several years ago. I would agree with Bob if these programs were the current and prominent RM’s on the market- but to even mention FHA and be so completely off the mark on the current RM offerings is irresponsible, especially when you are a supposed expert. I am going to personally send Bob Massi an old-fashioned written correspondence; this is truly unprofessional.

    • LegacyJim,

      The problem is not just Bob; it is also us. Like many in the industry who are unfamiliar with our own legacy, you understand the current market but little more. Bob understands the historic market but most likely not the current.

      So how is Bob right? First Bob is not stupid. There is a reason why he mentioned a home worth $400K and a “bank” appraisal at $300K and then went down a road so sadly unfamiliar to far too many originators in our industry today.

      Bob was describing the equity appreciation sharing arrangement option that was available with reverse mortgages not that far back in the reverse mortgage industry past. I was not around then, just like you. Even though it is still technically available, few if any offer it because of the perceived (and in a few cases actual) notion that lenders were taking advantage of borrowers with their low ball appraisals.

      I am not a school teacher. If you want to know the industry, I suggest you read up on it. Bob is right historically but he is dead wrong currently as to that aspect.

      So whose fault is it that Bob is so wrong? Yes, he has a responsibility to know the current condition of the loan he is describing but we all know there are few of those. The problem is that we as an industry also have a responsibility to make sure that are much fewer “Bobs” in the world and on that front we have failed.

      It starts with the knowledge that these trusted advisors rely on throughout their careers. It is simply amazing how many college professors in the schools of business and law have no idea what the current structure of reverse mortgages is. The problem starts there and moves up. Who do you think an attorney trusts, you or his professors? The same is true of CPAs and CFPs.

      I have heard many in the industry brag about how they came across a trusted advisor who knew about the product and helped them sell it or got it themselves. Yet in California alone there are far more CPAs and CFPs than the total number of HECMs our industry has produced in the last two calendar years. How many originators are in California, a 1,000? How many of those understand the product well enough to be able to “educate” an attorney, CPA, or CFP about the product without getting side tracked with anecdotes? How many command the grace necessary to be considerate enough in their presentation that they do not turn off their audience with their alleged “knowledge” of the products and our industry?

      While Bob needs to take action, so do we.

    • I whole heartedly agree. And having two personal friends that are often on Fox news as experts in their industries, they have told me that at times they are asked to speak on one topic and the day of the broadcast, the topic is changed, or Fox has already decided what spin they want to cast on the topic and put the expert on to support the conclusion they have already made. As a conservative I have favored Fox in the past to other major TV news outlets, but Fair and balanced? I think not.

      • James,

        There are few people outside of the legal or financial advisor communities who even know about equity appreciation sharing arrangements and reverse mortgages. I doubt if anyone at Fox was involved with that part of his presentation. BUT you could be right.

      • For a person with the pseudonym “The_Critic”, I find your responses to be very insightful and pragmatic. You fit the bill more than Fox News, perhaps you should change your username to “Fair_&_ Balanced” !

      • James,

        Thank you for your kind remarks but I am not so fair or balanced in my views either. They are in the business of not being so while I am just The_Critic. Thanks again.

      • James,

        Thank you for your kind remarks but I am not so fair or balanced in my views either. They are in the business of not being so while I am just The_Critic. Thanks again.

      • For a person with the pseudonym “The_Critic”, I find your responses to be very insightful and pragmatic. You fit the bill more than Fox News, perhaps you should change your username to “Fair_&_ Balanced” !

      • James,

        There are few people outside of the legal or financial advisor communities who even know about equity appreciation sharing arrangements and reverse mortgages. I doubt if anyone at Fox was involved with that part of his presentation. BUT you could be right.

    • I whole heartedly agree. And having two personal friends that are often on Fox news as experts in their industries, they have told me that at times they are asked to speak on one topic and the day of the broadcast, the topic is changed, or Fox has already decided what spin they want to cast on the topic and put the expert on to support the conclusion they have already made. As a conservative I have favored Fox in the past to other major TV news outlets, but Fair and balanced? I think not.

  • I hope NRMLA intends to reach out to Fox News with a response to that video clip. Is anyone held accountable for irresponsible journalism? The damage of a few of those type of segments can do is vast.

    • Matt,

      Your comment was not posted by the time I submitted mine.

      I know we like to think white knights will come in and rescue the situation. The facts are no one at Fox News cares that Bob just got it “old.” You might want to argue that if it is not current it is wrong but then again until shared appreciation is made illegal or removed from the realm of possibility, his points are not actually “wrong.”

      Even though lenders do not provide this option any more, it is up to us to rid ourselves of it or program detractors have very right to bring it up. While they may not be providing much consumer protection with such old historical criticism, like most of us they loathe apologizing for their shortcomings or retracting them. Some of the problem clearly falls on our shoulders.

      A better approach would be to contact Bob. He does not want to be embarrassed by being out-of-date. If the right party spoke with him, he might try to address it on a future segment where he is invited to participate. Who knows maybe Fox News might listen to some of our originators who have appeared on their shows but then again one wonders why they were not contacted to appear on that segment in the first place; it kind of puts things in perspective.

    • Matt,

      Your comment was not posted by the time I submitted mine.

      I know we like to think white knights will come in and rescue the situation. The facts are no one at Fox News cares that Bob just got it “old.” You might want to argue that if it is not current it is wrong but then again until shared appreciation is made illegal or removed from the realm of possibility, his points are not actually “wrong.”

      Even though lenders do not provide this option any more, it is up to us to rid ourselves of it or program detractors have very right to bring it up. While they may not be providing much consumer protection with such old historical criticism, like most of us they loathe apologizing for their shortcomings or retracting them. Some of the problem clearly falls on our shoulders.

      A better approach would be to contact Bob. He does not want to be embarrassed by being out-of-date. If the right party spoke with him, he might try to address it on a future segment where he is invited to participate. Who knows maybe Fox News might listen to some of our originators who have appeared on their shows but then again one wonders why they were not contacted to appear on that segment in the first place; it kind of puts things in perspective.

  • Folks…this is Fox News….they don’t care if they get it right. What they do care about is that their inflamatory stories, no matter what the subject, increase their ratings and get people to say “hey did you hear what Fox said!!!!” This is just another example of how they just attack….offer no solutions….and get people riled up…….It’s amazing how many people fall for such a tactic……lets just consider the source and move on

    • Bob,

      Wow, talking about a political bias.

      There is little doubt you believe what you write but it seems more politically inspired than correct. There is no evidence that the left supports the program. They had two years controlling Congress and the White House and never in the last decade has the program been so much in danger. Where was their support in any practical sense? HERA was an attempt by the left to ram what they wanted down the throat of a politically lame duck President. That was the legislation that changed the HECM program from the HUD GI fund to the HUD MMI fund.

      It is the political left which attacks HECMs far more vehemently than the political right. Some in our industry are mixed up on this issue. Senator McCaskill (D-MO) was the first Midwest Senator to support President Obama in the Iowa caucuses and long before Caroline Kennedy or her uncle supported him. Senator Kohl (D-WI) another Democrat has supported Senator McCaskill in her incessant attacks. Several Democratic members of the House have risen up in support of Senator McCaskill regarding HECMs.

      HECM legislation came into being during the Reagan Administration and was implemented during the Administration of his successor, President GHW Bush. Jack Kemp the HUD Secretary under Reagan and former candidate for the Republican Presidential Nomination championed the program and eventually became a very positive spokesperson for the industry before his demise. Former Senator Fred Thompson (R-TN) also supports the program as an active spokesperson. It is the FHA Commissioner of a right of center Republican President who greatly helped our program, Commissioner Brian Montgomery.

      As to Fox News, without question its news has a politically right slant and bias. Who doubts that? But that is politics. Here the issue is a subject that most on Fox either do not know anything about or they support it. They have every right to rely on the attorney who participated in that segment; I doubt if they went out and searched for an attorney with this position. HECMs really are not that significant to Fox News. If it was not for the US News article, it is very doubtful they would have even reported anything on it.

      If the industry were offering HECMs with equity appreciation sharing options, the attorney would have been on point. He obviously is out of date. It certainly was not a huge segment on Fox but with so many seniors watching Fox News, it takes a toll on the industry.

      • Critic
        Sorry to disappoint you but my comments were not politically motivated in any sense as both sides of the fence do a good job at not getting everything right, attacking….offering no solutions….and get people riled up. It’s just that Fox News is a master at the tatic and do it better than anyone else. So I guess that would be a compliment to Fox.

      • Critic
        Sorry to disappoint you but my comments were not politically motivated in any sense as both sides of the fence do a good job at not getting everything right, attacking….offering no solutions….and get people riled up. It’s just that Fox News is a master at the tatic and do it better than anyone else. So I guess that would be a compliment to Fox.

    • Bob,

      Wow, talking about a political bias.

      There is little doubt you believe what you write but it seems more politically inspired than correct. There is no evidence that the left supports the program. They had two years controlling Congress and the White House and never in the last decade has the program been so much in danger. Where was their support in any practical sense? HERA was an attempt by the left to ram what they wanted down the throat of a politically lame duck President. That was the legislation that changed the HECM program from the HUD GI fund to the HUD MMI fund.

      It is the political left which attacks HECMs far more vehemently than the political right. Some in our industry are mixed up on this issue. Senator McCaskill (D-MO) was the first Midwest Senator to support President Obama in the Iowa caucuses and long before Caroline Kennedy or her uncle supported him. Senator Kohl (D-WI) another Democrat has supported Senator McCaskill in her incessant attacks. Several Democratic members of the House have risen up in support of Senator McCaskill regarding HECMs.

      HECM legislation came into being during the Reagan Administration and was implemented during the Administration of his successor, President GHW Bush. Jack Kemp the HUD Secretary under Reagan and former candidate for the Republican Presidential Nomination championed the program and eventually became a very positive spokesperson for the industry before his demise. Former Senator Fred Thompson (R-TN) also supports the program as an active spokesperson. It is the FHA Commissioner of a right of center Republican President who greatly helped our program, Commissioner Brian Montgomery.

      As to Fox News, without question its news has a politically right slant and bias. Who doubts that? But that is politics. Here the issue is a subject that most on Fox either do not know anything about or they support it. They have every right to rely on the attorney who participated in that segment; I doubt if they went out and searched for an attorney with this position. HECMs really are not that significant to Fox News. If it was not for the US News article, it is very doubtful they would have even reported anything on it.

      If the industry were offering HECMs with equity appreciation sharing options, the attorney would have been on point. He obviously is out of date. It certainly was not a huge segment on Fox but with so many seniors watching Fox News, it takes a toll on the industry.

  • Folks…this is Fox News….they don’t care if they get it right. What they do care about is that their inflamatory stories, no matter what the subject, increase their ratings and get people to say “hey did you hear what Fox said!!!!” This is just another example of how they just attack….offer no solutions….and get people riled up…….It’s amazing how many people fall for such a tactic……lets just consider the source and move on

  • Fox News is by the far the most widely watched channel by seniors, CNN is second but far behind. Any one else getting tired of the pummeling with little or no defense? I just never seems to stop. I’ve been in this business 9 years I thought it would have been over long ago.

    • Lance,

      Peter Bell is right. Attacks of this nature wax and wane. I expect to see the next big attack to come from Elizabeth Warren and the CFPB report to Congress. I hope I am wrong.

  • Fox News is by the far the most widely watched channel by seniors, CNN is second but far behind. Any one else getting tired of the pummeling with little or no defense? I just never seems to stop. I’ve been in this business 9 years I thought it would have been over long ago.

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