Reverse mortgages a new threat to seniors

With the housing market in decline, unscrupulous sales agents are popping up in the booming reverse mortgage industry, where reports of deceptive and high-pressure sales tactics are worrying lawmakers and consumer advocates.

[Shenequa]

They need to make this type of swindling illegal. Preying on seniors is pathetic.

[The laughing liberal]

Informative story.

[Insurance Mathematician]

Reverse mortgages are scams to swindle the elderly out of a large portion of their life savings: their home equity. Financial vehicles already exist for them to tap into their home equity, if they really need to. The reverse-mortgage salesmen are snake-oil salesmen, often with scams to get the victims to put the cash proceeds into dubious, inappropriate investments... the list is endless... the salesmen are NOT financial advisors and their only goal is to steal money from the seniors.

Regarding the 92-year-old man who died soon after buying a deferred annuity: I find it hard to believe that his heirs had to forfeit any money to get the proceeds after his death; honest insurance companies put death benefits of the full account value in their annuities. There should be no surrender charge on death. It is rare that a deferred annuity is appropriate for a very old person if he or she wants the income or proceeds for himself or herself; it might be appropriate if its purpose is to pass on wealth to children.

[Insurance Mathematician]

I forgot to include this:

Reverse mortgages are very very expensive ways for seniors to borrow on their home equity. Existing types of loans etc. leave the borrower with a LOT more money than reverse mortgages.

Remember: every time you make a financial transaction such as a loan, reverse mortgage, buy an annuity, the person selling it to you is motivated by his or her commission or profit that comes out of your pocket, and similarly so for the institution: it earns a profit.

[IDIOTA UNOS]

Insurance Mathematician wrote:

I forgot to include this:
Reverse mortgages are very very expensive ways for seniors to borrow on their home equity. Existing types of loans etc. leave the borrower with a LOT more money than reverse mortgages.
Remember: every time you make a financial transaction such as a loan, reverse mortgage, buy an annuity, the person selling it to you is motivated by his or her commission or profit that comes out of your pocket, and similarly so for the institution: it earns a profit.

I think disadvantage outweighs more ... if take out a reverse mortgage
Bad - what you just said!

The Good, those seniors ( gets pay upto 85% of fair market value can be put in annuity to earn interest and time comes the heirs can receive the difference from the sale and payoff the mortgage for the return of the home. Hire a laywer to look at contract, some above may not apply!) who don't wan't to move (not mobile) and are strapped for cash to pay the bills, vacation ...

[Bill R]

IDIOTA UNOS wrote:

<quoted text>
I think disadvantage outweighs more ... if take out a reverse mortgage
Bad - what you just said!
The Good, those seniors ( gets pay upto 85% of fair market value can be put in annuity to earn interest and time comes the heirs can receive the difference from the sale and payoff the mortgage for the return of the home. Hire a laywer to look at contract, some above may not apply!) who don't wan't to move (not mobile) and are strapped for cash to pay the bills, vacation ...

I don't doubt that there are those who would take
advantage of seniors unable to understand all the
ramifications of taking out a reverse mortgage,
but this fact should not preclude the possibility
that for some it can be a good thing.

We investigated the reverse mortgage option prior
to my parents' deaths earlier this year and
found that, in fact, a reverse mortgage is some-
thing of a generic term. There are several dif-
ferent possibilities that fall under the rubric
of a reverse mortgage. In our case we found
some options completely unacceptable and risk-
filled. Other options were quite conservative
in nature and, for my parents' situation, offered
them some sensible and decent choices they would
not have otherwise had available to them.

All kinds of factors need to be considered when
looking at a reverse mortgage, not the least of
which is a realistic assessment of the life
situation of the senior(s) involved. Our view
was that some forms of reverse mortgages are
good financial investments when understood to
be short term instruments that relieve the
stress and worry about "end of life" issues.
I would not recommend them as a means to "enjoy"
retirement .... the well can dry up too soon.

[IDIOTA UNOS]

Bill R wrote:

<quoted text>
I don't doubt that there are those who would take
advantage of seniors unable to understand all the
ramifications of taking out a reverse mortgage,
but this fact should not preclude the possibility
that for some it can be a good thing.
We investigated the reverse mortgage option prior
to my parents' deaths earlier this year and
found that, in fact, a reverse mortgage is some-
thing of a generic term. There are several dif-
ferent possibilities that fall under the rubric
of a reverse mortgage. In our case we found
some options completely unacceptable and risk-
filled. Other options were quite conservative
in nature and, for my parents' situation, offered
them some sensible and decent choices they would
not have otherwise had available to them.
All kinds of factors need to be considered when
looking at a reverse mortgage, not the least of
which is a realistic assessment of the life
situation of the senior(s) involved. Our view
was that some forms of reverse mortgages are
good financial investments when understood to
be short term instruments that relieve the
stress and worry about "end of life" issues.
I would not recommend them as a means to "enjoy"
retirement .... the well can dry up too soon.

That is why you have to investigate the risk vs reward , the advantages and disadvantage of taking out a senior reverse mortgage plan; called do a due-diligence on every aspects of the contract terms and conditions... Caveat Emptor ! You know Bill you are right few firms are conservative and others you don't even want to touch. The financial/mortgage industry... are filled with sharks, consumer need to get educated early about estate planning, financial matters... The thing that really irks me are those profit seeking sharks the takes advantage of mostly seniors, minorities, the working class... who are cash poor but equity rich! Education is the only answer!

I see you and WWW... are doing putting good in debunking RP supporter ; look like you both don't need any help. You know RP is plant by evil, do you think?!

Merry Christmas and Happy new year to you and family Billr