Reverse Mortgage

[des1954]

If you, your parents, your friends, or anyone you know is contemplating getting a reverse mortgage, don't! Not until you get the September 2009 Consumer Report magazine and read what they have to say about it. CR devoted 5 & 1/2 pages on the topic. That length is usually reserved for autos or TV's - not financial topics.

Seniors seem to be the new bank targets, and in some cases, a reverse mortgage can be a good thing. In most cases it's not. So again, get this issue of CR, read the article, & decide for yourself.

My MIL was considering one & after we read the article we told her if she was in financial trouble to call us first. It would be better for her to sell her home & move in with us than to take a reverse mortgage.

 

[lawnspecialties]

I'm a big Clark Howard and Dave Ramsey fan on talk radio. They hate reverse mortgages.

The concept could make sense for some folks but the fees the banks put on them is a total scam. Large banks have learned "fees" are the way to huge profits these days. The CEO of Bank of America, Kenneth Lewis, just recently bragged to a group of analysts that they were expecting approximately $10 bilion dollars in fees annually from Bank of America customers.

Good job looking out for the MIL.

 

[DaveInTN]

Oh come on, I can't imagine a bank ever taking advantage of anyone. Oh wait, I work for a bank. Scratch that.

 

[PolynesianPixie]

I haven't read the CR article, but when I first heard about this I thought how awful for people who have already paid for their home...their largest investment...to essentially have to pay for it again! You're right Debbie, they'd be better off selling and getting a condo or moving in with a family member, most likey!

 

[2goofycampers]

Every time I see that commercial I wonder, when Robert Wagner will be taking out his reverse mortgage.

 

[Just Beachy]

Don't even get me started with the banks! I'm still mad over all the bailout $ they have been given by us taxpayers, and then will proceed to fork over billions of $ in BONUSES this year!!! Like I said....don't get me started!!

 

[chief19spixi]

I know how you feel!!

 

[ntsammy5]

I hate banks and I work for one - oh, I just remembered that's one of the reasons I hate them!

 

[ftwildernessguy]

The concept itself isn't bad - giving elderly people the opportunity to stay in their homes and cash in on the equity to supplement their incomes. The problem is the lending institutions decided to tack on "fees" because they weren't satisfied waiting until the old person died to cash in on their investment, and they were taking a risk with the housing market, assuming the values would increase (which we found out wasn't a sure thing by any means). It's still not a bad idea in its pure form, but unfortunately, it has been corrupted.

 

[Pirate-Jeff]

If there isn't money in it for the lender (big time) they wouldn't be any adds on TV would they......

 

[ibm2010]

I would like to offer that not all banks are guilty of creating the financial mess. I work for a bank that did not take bail out money, did not write sub-prime mortgages, does not write reverse mortgages and we offer free personal and business checking accounts.
While I know banks have some ownership in the current financial mess I encourage you not to forget the individuals who applied for mortgages that could not afford them (yet said they could) and the government that suggested every American should own a home regardless if they have a down payment or not.

 

[ntsammy5]

I know this is getting close to political but my vote for the two biggest causes are the credit rating agencies like Moodys (everything cannot be AAA) and AIG.

 

[bigdisneydaddy]

I love my credit union........

 

[LarryJ]

I love my credit union........

Yep long live NFCU and they do all their mortgages in house and don't sell them on the secondary market. Not the cheapest, but absolutely solid and where all our nest egg outside of our home is kept.

I agree that reverse mortgages are a bad idea, but a lot of older couples or homeowners don't know what else to do if they need money for meds or medical, etc. and fall for the sweet talking lender hawking these reverse mortgages.

Larry

 

[Just Beachy]

I would like to offer that not all banks are guilty of creating the financial mess. I work for a bank that did not take bail out money, did not write sub-prime mortgages, does not write reverse mortgages and we offer free personal and business checking accounts.
While I know banks have some ownership in the current financial mess I encourage you not to forget the individuals who applied for mortgages that could not afford them (yet said they could) and the government that suggested every American should own a home regardless if they have a down payment or not.

I absolutely agree with you. I remember several years ago doing a refi on our home. The bank wanted to loan us an exorbitant amount of $. By the glazed over look in my dh's eyes, I could tell he was thinking of all the neat new toys he could buy with the extra cash. However, I actually had to firmly tell the mortgage rep NO. There was no way I could have paid back what they WANTED to give us (yes...they tried to argue with me that we could afford it. If their people said we were approved for that amount, then it had to be so). I know there were TONS of people who didn't care.

 

[ftwildernessguy]

I am frequently glad I did not buy as big a house as the bank said I could.

 

[Born 2 Fish]

I am frequently glad I did not buy as big a house as the bank said I could.

me too,, I hate to vacuum.

 

[ntsammy5]

my house is de minimis

 

[ob1quixote]

An older couple down the other end of the block had a reverse mortage for years.

Just a month ago, the bank made it's final payment on the mortgage, and the couple was forced to move out. Evidently one of their cars was tied to it as well, left in the driveway...

 

[ftwildernessguy]

An older couple down the other end of the block had a reverse mortage for years.

Just a month ago, the bank made it's final payment on the mortgage, and the couple was forced to move out. Evidently one of their cars was tied to it as well, left in the driveway...

Something doesn't sound right about this. A true reverse mortgage doesn't work this way, unless the couple was relying on the monthly payments to pay their real estate taxes and lost the house to taxes. Also, no other assets would be tied to the reverse motgage. I suspect they had some other sort of equity loan.