ABC Arizona: Reverse Mortgages Right for Some, Not Everyone

When budgets tighten during retirement years, it helps to find “unique places” to get more money. For some retirees, a reverse mortgage can be a helpful solution, according to a recent ABC-15 Arizona news story.

Appearing on the Financial Fitness Zone portion of the ABC-15 Morning News this week, reverse mortgages took the spotlight for how they can shore up a person’s finances during retirement, especially when income from Social Security or pensions fall short.

“The reverse mortgage is a way to supplement that,” said Don Hagen, AVP of Real Estate Lending at Phoenix-based Desert Schools Federal Credit Union, in the segment. “It’s a way to actually get yourself another additional income stream.”

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The segment also discusses some frequently asked questions and concerns regarding reverse mortgages, including what happens to the home after the borrower dies, and what does the bank do when the homeowner passes away?

“Bottom line: check with your financial institution after you check with your family members,” concludes ABC-15 Morning News Anchor Dan Spindle in the segment. “This decision will affect them long after you’re gone.”

View the ABC-15 Arizona segment.

Written by Jason Oliva

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  • How confusing. Too much euphemism and too little hard core facts.

    A reverse mortgage is not a way to “get yourself another additional income stream.” Reverse mortgages provide cash flow not income. Cash flow may either have to be repaid or may not. Income on the other hand generally does NOT have to be repaid.

    The lien position held by the lender or FHA when the reverse mortgage moves into the due and payable status is legally far more than saying that you owe a certain amount of money. It says you owe this amount of money and either pay it off (limited for heirs) within the required time (including any extensions) or we will come and take the home. Yes, short sales may be available,etc. but the maximum liability on the home is the home itself. All reverse mortgages originated in the last two decades plus are by federal law nonrecourse [15 USC 1602(bb)].

  • I felt the segment and the video was fairly decent. However, when asked certain questions, such as, “Is a reverse mortgage for everyone”? The answer was an abrupt “NO”, which is true but the way he said it could be taken in various ways, which one could be taken as a negative statement.
    Even thought the gentlemen’s answer was correct, he did not go further and explain why a reverse mortgage is not for everyone! If he did explain further the reason for his answer, it would have cleared up any negativity in the minds of the people watching the report..

    I think this is why we in the industry question the news media on how they present the subject of reverse mortgages. We work with seniors daily and we know how the intricacies of the product needs to be explained thoroughly to them. The news media does not!!

    John A. Smaldone

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