CNN: Introducing the HECM Saver

Through an informational video in its online coverage at CNNMoney.com, discusses reverse mortgages and introduces the HECM Saver to viewers and readers who might not be familiar with the newer product.

In CNN’s “Ask the Expert” segment, Money Magazine’s Walter Updegrave covers the basics in a review of the HECM Standard, identifying pros, cons and several drawbacks including the initial insurance premium equal to 2% of the home.

With regard to the 2% insurance premium, “Although you don’t have to pay this charge out of pocket,” Updegrave says in the video, “it does raise the overall rate of borrowing, and can make the effective interest rate you pay astronomical if you end up drawing very little against your reverse mortgage, or if you die or move from your home shortly after taking out the loan.”

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The video also covers the HECM Saver, noting the substantial difference in insurance premium between the Standard and the Saver. “That lower upfront cost makes a reverse mortgage loan potentially more appealing if you are planning to use it sparingly, perhaps as a backup line of credit or an emergency fund, or if you think you might not stay in your home very long,” he says. CNN notes that if you need a larger loan, the Standard is the better choice.

See the video here.

Written by Elizabeth Ecker

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    • dduck12,

      Like you I ain’t 61 anymore. Neither lady looked older than 61 and not very close to that age. It was a silly faux pas. I guess they were depicting a woman with a POA going to a face-to-face counseling session (LOL).

  • It was great to have some facts about HECMs presented accurately and without bias. As good as it may have been, to see the “recent Consumers Union report” highlighted and by implication recommended was very, very disappointing. If the intent of the segment was to get the facts out, it did its job. If it was to discuss Savers, it failed.

    What the segment totally lacked was insight. Being a senior, I listened to the message as if my understanding of HECMs was that of most of the borrowers I work with. The only message I got was some basics and the fact that Savers are cheaper than Standards upfront but offer less proceeds. There was nothing presented about fixed versus adjustable rate Savers. If I was listening to understand HECMs or gain insights into when the Saver is more appropriate, it was a total and complete failure.

    Here is an obviously very bright financial and experienced financial correspondent with little or no idea on how to use a no required monthly interest or principal mortgage. It reminded me of someone trying to describe Amway soap when they had not done a few loads of wash using it and other brands to compare results. It was like listening to a MD with no specialization in brain surgery trying to discuss the latest technology used to repair eye problems associated with the brain not the eye itself. It was not satisfactory if the purpose of the segment was to introduce Savers.

  • Just getting the facts right, while a good start, does little to vanquish the bias against our products. If that isn’t evident, how could the same person who presented the facts so well in this segment also espouse the recent Consumers Union report in that same segment? The two can go hand in hand and unfortunately do each and every day.

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