Fox News: Is Getting a Reverse Mortgage a Good Idea?

Reverse mortgages have undergone several key changes this year, but for the masses that aren’t familiar with these products, it still begs the question of where taking out a reverse loan is a smart move, according to a recent Fox News TV segment.

Featuring Fox News’ “The Property Man” Bob Massi, the video segment describes how reverse mortgages are different today, specifically touching on the topic of the Financial Assessment.

“It’s something that came into effect this April,” Massi said. “It’s a good thing because it preserves the asset.”

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Massi, who has been outspoken  lately on how reverse mortgages can benefit consumers in a series of Fox News segments this year, touched on the vetting criteria lenders now consider as part of the reverse mortgage application process.

Fielding a question from Fox & Friends anchor Steve Doocy, Massi also clarifies what happens to the non-borrowing spouse in the event that their borrowing spouse dies, describing the policy update this year that allows surviving non-borrowing spouses to remain in the home—resolving an issue that has stoked controversy around reverse mortgages in the past.

“Reverse mortgage in and of itself sort of has this negative connotation,” Massi said in the segment. “It’s actually not as bad as you think. It can definitely help people, but you have to understand the rules and regulation.”

View the Fox News segment.

Written by Jason Oliva

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  • Some say ignorance is bliss but calling reverse mortgage proceeds income or supplemental income as done in this segment is not just false but also misleading. Unlike income, reverse mortgage proceeds are subject to repayment.

    Now we have a new term called set offs related to reverse mortgages. In fact Bob tells us that (not just HECMs but all) reverse mortgages require financial assessment.

    While Bob attributes nonpayment of taxes and insurance as the source of a lot of foreclosures, he completely misses the largest source, failure to pay off the balance due.

    Bob also displays his ignorance on non-borrowing spouse rules. These rules are not reverse mortgage rules but rather solely HECM rules. Non-borrowing spouses are not eligible to stay in the home until their passing if the borrowing spouse dies first. The only way that can occur is if the non-borrowing spouse meets qualification rules under Mortgagee Letter 2014-07, 2015-02, or 2015-15 (which applies is based on the date that the HECM received its case number assignment).

    I would love to offer the reverse mortgages Bob presents but for now all we have are the ones that actually exist.

    • Sorry, but I think that you overstated your comments. Failure to pay the amount due comes into effect if the person passes on, leaves the house, etc. Otherwise, there is no payment due. Further, while there are certain requirements for the NBS to qualify for the deferred payment of the amount due, they are essentially routine and should pose absolutely no problem to the surviving NBS.

      • Jonathan,

        “Otherwise, there is no payment due.” Really? You forgot one important word, “currently.” There is a payment due but the event triggering the payment due in the first part of your comment just hasn’t happened yet but it is coming.

        As to foreclosure, why do you NOT want transparency? Foreclosure has been the most common way for HECMs to terminate in this decade. Yes, most of us know the rules regarding when foreclosure occurs but few describe those rules as the most common means for HECMs to terminate. Non-payment of taxes and insurance is the least cause of default leading to foreclosure and yet that is generally the only cause of foreclosure that is presented to prospects.

        The term “non-borrowing spouse” includes all surviving spouses which also encompasses those who are married to a borrower AFTER a HECM closes. Non-borrowing spouses who become spouses after the HECM closes are by definition not qualified.

        Divorce in this country is more common among seniors than at any time in history. If a senior divorces, the non-borrowing spouse has no rights in the home since they are not an owner. Unless the non-borrowing spouse is particularly astute about property settlements (or has competent representation) and has some leverage in the divorce, the biggest martial asset could be excluded from the property settlement.

        Routine? Yes, procedurally for lenders and servicers but not for borrowers. Most HECM non-borrowing spouses will only be HECM non-borrowing spouses once. For any qualified non-borrowing spouse, it will be anything other than routine especially since it takes the death of the borrowing spouse to trigger their separate rights and they lose all rights to proceeds.

        To say we now have fixed and legal guidelines for new borrowers is much different than calling the process routine.

  • What does he mean by “it’s not as bad as you think”. This is supposed to be a positive statement about Reverse Mortgages? Doesn’t seem like it to me. It basically contradicts the balance of the article which is rather pro on the subject. Didn’t need that sentence.

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