Nightly Business News Segment Explores Reverse Mortgage “Change in Thinking”

There has been a change in thinking about the reverse mortgage market, says a Nightly Business Report this week. “Once rife with fraud, [reverse mortgages are] now becoming a tool many retirees are using to make ends meet,” the report states.

PBS’s Money File segment details the “Do’s and Don’ts & Ins and Outs” of reverse mortgages.

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Nightly News’ Karen Gibbs covers the non-recourse aspect of the loans, but cautions that there are closing costs as well as adjustable interest rates and mortgage insurance that can be downsides.

“If you’re thinking of a reverse mortgage as a way to get cash to pay bills or looking for ways to transfer assets in your estate, consult an attorney familiar with estate planning to find out what’s best for you,”

You’ll never owe more than the house is worth, no matter how high interest rates go or how many payments you`ve received. The mortgage is due in full plus interest and fees only when you move, die or sell the home. Any remaining equity belongs to you or your estate.

But there are downside to reverse mortgages: high closing costs, adjustable interest rates and mortgage insurance that can all add up and mortgage counseling is required by law. If you`re thinking of a reverse mortgage as a way to get cash to pay bills or looking for ways to transfer assets in your estate, consult an attorney familiar with estate planning to find out what`s best for you,” Gibbs advises.

View the video on NBR.com.

Written by Elizabeth Ecker

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  • Some in our industry would describe this segment as positive since it did not advise against getting a reverse mortgage. Such limited classification does more harm than good.

    Perhaps a better classification system would be to divide these kinds of segments into superior, slightly problematic, problematic, very problematic, and negative. While it may not have been negative, neither was it superior. It would seem to fit into either the problematic or very problematic categories.

    Hopefully NRMLA will be reaching out to this analyst.

  • I agree with Jim Veale on most of what he said. However, If I were a senior watching the report, I would not have left the TV feeling overly comfortable taking out a reverse mortgage.

    In some ways the negativity may have out weighed the positive. I don’t know if it will do any good for NRMLA to reach out to this analyst but it can’t hurt. The problem is what ever good or bad that has been created by the report is done!

    John A. Smaldone

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