“No Respect” for Reverse Mortgages?

Despite rave review from some borrowers, reverse mortgages are unpopular among those eligible to get one in terms of usage, writes a Boston College Center for Retirement Research blog post.

The CRR’s Squared Away blog highlights Bob and Fran Ciaccia, who took out a reverse mortgage in 2005 to take advantage of the $220,000 of home equity they had amassed. Using their $120,000 HECM loan, the couple bought a recreational vehicle to travel around their home state of Pennsylvania and have access to the rest of their funds through a line of credit. 

“I cannot find a downside,” Fran Ciaccia, a retired high school cafeteria cook from Levittown, Pa., says in the blog post. “We have told so many people about it.”


While the Ciaccias are happy with their decision, AARP estimates that the utilization rate among older Americans is only about 1%.


Nearly 54,700 reverse mortgages were originated in 2012 with an average loan size of about $158,000—less than half of 2009’s volume, when HECM originations peaked, according to data from the Department of Housing and Urban Development. 

One reason why loan volume dropped off: the housing market crash, writes Squared Away, which depleted many Americans’ home equity. 

“But home equity is often the largest asset that older Americans have, and reverse mortgages, done right, can bring in much-needed income for retirees, who use the money for medical bills or to improve their lives or even pay off their mortgage,” says the blog. 

One concern often cited in relation to taking out a reverse mortgage is the issue of inheritance. The Ciaccias spoke with their three children before getting the loan and ultimately decided to move forward. 

“You know what?” Mrs. Ciaccia said.  “They don’t need our money.”

Read the whole post at Squared Away

Written by Alyssa Gerace

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  • I would use this story for a testimonial but when you got done with it, it won’t work, of course — too much of the same stuff that drives this industry into the ground. Whatever happened to positive stories about the RM business? Are they illegal too? Is it any wonder the industry is in the tank, or that the LOs are accused of steering when they try to be responsible? Let the borrower beware — the industry will talk them out of it before they get a chance to call the counselor or convince the prospect that getting one of these RMs could be a problem they don’t want. Testimonials turning into warnings about things that could go wrong. Oh, and yes, new restrictions are coming that will make them even more wary of those of us who still believe in the future of the RM and do our duty to God and our country (and seniors). What a stupid industry we are, devising all those new ways to shoot ourselves in the foot.

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