Fox Business host Bob Massi dedicated a segment on his real estate show to the frequently misunderstood reverse mortgage for purchase program last week, breaking down the nuances of the transactions in a wildly positive piece.
On Friday’s episode of “The Property Man,” Massi interviewed Josh Shein, senior director of reverse lending at Home Point Financial Corporation in Owings Mills, Md., and featured two couples who used the Home Equity Conversion Mortgage for Purchase transaction to downsize and save money for other uses.
First up: Karl and Starla Kramer, a Chandler, Ariz. couple that traded in their 3,200-square-foot home for an 1,841-square-foot property after Karl Kramer’s retirement. According to Massi, the Kramers sold their original home for $500,000, put $143,000 in cash down on the second house, and then used a HECM to cover the rest.
“This allowed them to keep the rest of the money in their pocket, and use the money for whatever they wish,” Shein said.
Both Shein and Massi provide straightforward explanations of the program and how it works for the uninitiated, including the age requirements, tax-and-insurance payments, and the types of properties that qualify. Shein also emphasized that the product is simply a loan, walking viewers through the way in which the principal balance grows each month instead of declining as in a “forward” mortgage.
But perhaps most importantly for reverse mortgage professionals, the segment features fairly gushing testimonials from the two couples, both of whom seem completely satisfied with their decisions.
In response to a question from Massi about the potential strangeness of not having a monthly mortgage payment, Karl Kramer replied, “I didn’t have a problem with not having a payment. It was fine.”
His wife, a real estate agent, agreed, noting that for years their regular mortgage payment disappeared from their bank accounts each month.
“Now, on the 15th of the month, we kind of go: Wow, let’s go to a movie,” Starla Kramer said, referring to their monthly cash influx from the HECM.
The second couple, Ralph and Mary, took out a reverse mortgage on their home five years ago, then decided to use another HECM to downsize into a smaller property.
“If the market tanks, you’re going to lose the equity in your house, but even if you own your house and the market tanks, it’s exactly the same thing,” Ralph — whose last name was not given — said about the potential risks of taking out a reverse mortgage. “What you’re doing is receiving your equity up front, which is, I think, a smart move if you have a plan.”
This isn’t Shein’s first time sitting down with Massi, a real estate lawyer and the owner of a very impressive hairstyle: He previously appeared on “The Property Man” back in 2015, when he shared two other reverse mortgage success stories with the Fox host and his viewers. Massi himself has been something of a HECM cheerleader in his own right, penning a column about the products and appearing on President Trump’s favorite program, “Fox & Friends,” to discuss Financial Assessment and the “new” reverse mortgage.
Watch the full segment here.
Written by Alex Spanko