NRMLA Study Counters Critical Reverse Mortgage Arguments

The first part of a two-part article published in the McComb Daily out of McComb County, Michigan, aims to refute the arguments of reverse mortgage critics by citing a National Reverse Mortgage Lenders Association study, released earlier this year.

“Reverse mortgages have been the target of a lot of bad publicity of late, much of it concluding that such loans are dangerous, expensive and generally poor choices,” the article begins. “But new research shows that the folks who have used the loans to tap into the equity they have in their homes are overwhelmingly happy with their decisions.”

Citing responses in the study regarding the happiness and satisfaction of those who have taken reverse mortgage loans, the article says those seniors have given the product “exceptionally high” marks.

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Among other survey findings included in the article: Nine of 10 current reverse-mortgage borrowers said they were not pressured to take out the loan; 75% said they understood what they were doing either “well” or “very well,” and 77% received professional counseling before deciding to move forward with a reverse mortgage. Among that latter group, 86 percent found the counseling useful. (The article also states that reverse mortgage counseling is required by a federal mandate.)

In refuting the critique that seniors who take out reverse mortgages will not be able to leave their family homes to their offspring when they die, the article points to a study finding that less than half still live in the same place where they raised their kids and that most seniors don’t care about bequeathing their homes to their children.

Because the study was sponsored by NRMLA, the article says, the results may be slightly tainted, however, an analyst with survey experience is quoted as saying that seldom do respondents give a topic or product such a strong vote of confidence.

View the entire article.

Written by Elizabeth Ecker

 

 

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  • Late last night I wrote about my disagreement with Peter Bell over his wording in regard to the displaced spouse rule. This evening I write to send my compliments for establishing a strong basis to have a positive public relations campaign.

    Once again Peter Bell and NRMLA has done an outstanding job.

    • Dear Cynic,
      in my opinion you are one of the most articulate and intelligent people
      in the reverse mortgage business. As always,your comments are always constructive and well thought out. Thanks for providing such great insights to the rest of the industry.
      Best wishes,
      John Mitchell
      PS-I would welcome your input on my study that supports the fact that reverse mortgages saves Medicaid dollars.At your convenience, contact me at john@rmeducator.com

  • Kudos to Peter Bell and NRMLA. Public opinion about reverse mortgages would be enhanced if the issues and objections were handled before they can be raised. Instead of having critics raising objections, let some press from those in the field raise and answer them correctly. To be quite honest, I don’t have any seniors who are fearful of a reverse mortgage prior to taking one out; they know it’s probably the best option for them, and for the ones who have current mortgages, they are only too happy to dump them and have a better quality of life. Also, it’s up to the mortgage originator to educate their borrower and the public at large about this life changing product, and it is LIFE changing.
    Kathleen Adler (Kathie Adler), Senior Reverse Mortgage Specialist, Advisors Mortgage Group, Wall, New Jersey. (NMLS License #65780)

  • Yes, kudos to Peter Bell. However, why is it so difficult to get the wording correct in regards to leaving the house to the children? The borrowers leave the house, they just leave it with less equity. The waters are muddied by sloppy writing. Tell it like it is….they can and do leave the home to the kids. After 15 years doing this loan, it is still the number one objection…”but the bank gets the house”. It is all about the title.

    • Mr. Evans,

      The problem is few want to explain this mortgage for what it is, first and foremost a non-recourse mortgage. Other than a math calculation, please explain how a reverse mortgage reduces equity. 100% of the equity belongs to the senior before and after placing a reverse mortgage unless their there is some kind of equity sharing agreement attached to it. It is the somewhat naive discussions presented on equity that confuse so many when it comes to reverse mortgages. Equity means far more than a term used in a math equation.

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