What Do Y'all See/Think When "Reverse Mortgage" Commercials Come On Teevee?

[AzDar]

They make me angry. Almost as if we are being told that we should expect to be indebted cradle to grave. Work hard all your life, pay off the mortgage on your very own 'American Dream'...but don't expect that you'll be able to keep it that way. The ever-rising cost of food, gas, and health care will SEE to that. In other words: We OWN you, get used to it. :(

Or perhaps I've had too much caffeine, and am unnecessarily maligning a viable financial tool for the elderly.
What do you think?

[LiberalAndProud]

1. What the commercials say and the underlying motive aren't even remotely related.

They say they want you to have financial security in your old age.

What they mean is they want to get their grubby paws on what you have, little enough though it is.

At least, that's the message I'm receiving.

[MineralMan]

2. I think it can work for some people, who aren't leaving an

estate for their offspring and who are in danger of losing their paid-for home. I also think it's being misused by many, and oversold by people who do not have the best interests of their clients in mind. It takes great care to not be taken.

My wife and I have a paid-for home and no heirs. Somewhere down the road it just may make sense for us. Right now, it doesn't, though.

[patrice]

3. I think about leaving my house to my kids. nt

[patrice]

6. For those who don't want to do that, I wonder whether they'd prefer to finance someform of care

in their declining years, rather than a deteriorating piece of property that ends up belonging to a bank.

[Dappleganger]

23. So did my parents, it didn't work out that way.

We finally got a contract after their home was on the market over a year, thank goodness (if the inspection goes through in a week). Mom wanted it left to my sister and I although it isn't much it would have been pretty helpful. Now we have had to sell it to put dad into a higher-level of ALZ care (mom passed away at 66 over 2 years ago). The lesson is that there are no guarantees especially when it comes to paying for medical care.

[prairierose]

4. What I think first is....

just another scam for Wall street and the banksters to get their hands on every penny people have left.

[katnapped]

7. Anyone see the one with

Fred Thompson?

Isn't he a government-hating Republican...extolling the benefits of a government insured program?

HUH?!?!?

[RKP5637]

5. Yeah, they annoy me too, I think the same. Now let's go after the old folks and

take away what they've got left.

[WCGreen]

8. Actually, for someone with no family and a home that has depreciated

for the time, it might be a viable alternative.

But if anyone can sell their home and then move to a senior community, that might be a better option.

I have clients who have done both.

In the end, most of their money was sucked out of their pockets anyway.

If you go into an assisted living community, you are talking about 3,000 to 4,000 a month without outside expenses.

They want to squeeze every last penny out of you so that you end up in a medicare...

[napi21]

9. I've hard the fees on rev. mtg's are VERY HIGH & it's usually

a bad idea.

[flvegan]

10. I immediately think of the extortion involved with the fees.

Not all lenders, I'm sure. I've seen a number of them that will schedule 10% in "fees" on the new loan. These aren't used to pay off liens or taxes, mind you. These are additional closing costs that diminish the cash to the borrower at settlement. It's damn shameful.

[XanaDUer]

11. One

1. Another way to rip off the average older American and

2. It may be viable for me someday. I have no kids and no one to worry about leaving anything to, so, if I thought it would help me raise my standard of living while alive, I might consider it.

But I'd read the fine print very, very closely.

[1monster]

12. I think "crooks"

[stevedeshazer]

13. Ripoff/Sleepy Fred Thompson

Taking advantage of elderly naive people.

[old mark]

14. I think it is just one more scam. I recall reading about the boomers retiring and how many

"businessmen" have been planning for years to remove some of our cash for their own use.

I wish our government had planned our social security/medicare/healthcare programs as well as the sharks planned to take our money...but despite all the articles written over the last 30 years or so, the politicians seem surprised that so many of us actually want to retire, and that we are all getting old at the same time...


mark

[Not Me]

15. I expect to retire in 4-5 years.

At which time I fully intend to sell this (paid for)house, which is larger than we need now, and downsize to either a condo or an garden apartment; bank the savings and use the time and money that was spent on taxes and upkeep to travel.
These instruments have no appeal to me.

[Pyrzqxgl]

16. That and Pat Boone selling gold tell me the crooks think they're in charge.

[NJCher]

17. it could be a viable deal

I don't know if your ad is the same as the ones we've seen.

My husband told me about this program about eight months ago. It is based on a program through the government and you have to be 62 to qualify. His son is a v.p. at a bank and is knowledgeable about the program. He thinks it is a good deal and he highly recommended it to me, although I am too young for the program. If it exists in its current state, though, I would certainly consider it if I reach that age.


Cher

[Liberal In Texas]

18. It is possible to lose a home with a reverse mortgage.

Reverse Mortgages should be a last resort. It is the most expensive mortgage available and if you are childless and have no other heirs to leave your estate to it may be useful for people in dire financial straits.

We've been trying to talk my 85 year old mother out of one. She has been high pressured by a guy at the bank she called. It isn't necessary for her as my brother is lending her money for any bills she needs to pay against the eventual sale of the house.

Here's what Consumers Union says:
http://www.defendyourdollars.org/2010/12/reverse_mortgage_tips_for_cons.html

[Curmudgeoness]

28. A twist that I had not heard before. Scam is much too kind

of a word to use for this. Why is it even legal? Aren't the elderly the largest part of the population targetted by scamsters? Don't we try to protect them from abuses?

From the link you provided:


Borrower Beware-Continuing Expenses with Reverse Mortgages

• The borrower needs to stay current on all payments owed for property taxes, homeowners’ insurance and, if applicable, all homeowners’ association fees.
• The borrower is also obligated to adequately maintain the home or the loan may be called, for example, if the borrower cannot repair a leaky roof, wood rot or termite infestation.
• If the senior defaults on the loan, there may be a foreclosure (Borrowers with reverse mortgages can and do experience foreclosures).




This leads me to more questions than answers. Especially the "if the senior defaults on the loan" part. How do you default on a loan that you do not pay back?

[GeorgeGist]

19. I see capitalists trying to make a money ...

from the work of others. Like every capitalist commercial.

[KT2000]

20. Picking the last pocket

As I understand it - some are a scam.
Considering the cable stations' record on having advertisers that are scams, I would bet the ones we see on tv are ones to stay away from - IMHO.
For the ones that are not - if the person has to live in a nursing home they would be required to sell their home to pay for those costs, or if they go on Medicaid sometimes they will wait till the person dies to recover their money from the home sale - in WA state.

[TheCowsCameHome]

21. I reverse the remote control and change the channel

Some so-called investment expert huckster was peddling them on a Boston financial talk show today.

*Click*

[Odin2005]

22. I'm reminded of the bumper stickers saying " I spent all my kids' Inheritance money!"

:grr:

[Vinca]

24. I think one word: scam. You know Grandma's getting taken for a ride.

[jeff47]

25. They're very useful in some circumstances

but like all financial instruments, they are not for everyone.

[pitohui]

26. i think you don't know what a reverse mortgage is

after age 62 it is possible to obtain a reverse mortgage on your paid-off house which means, in short, that the bank pays YOU every month and you get to continue living in your home, while enjoying a monthly income

i fail to see the problem, it's a good plan that works for many, and it only pisses off greedy children who expected to inherit their folks home instead of working, buying their own home, and paying off their own mortgage


i'm really starting to think that inheritances shouldn't be allowed, all they do is spoil the character of the person who thinks they will inherit

i'm afraid i think that if your parents have worked hard, paid off their home, and now want a reverse mortgage so they can take a cruise once in a while or have some other luxuries in their old age instead of just sitting on the money so someone else can enjoy it when they die...i say, good for them

when i'm old enough, i will likely shop around and get a reverse mortgage, a source of monthly income in old age is nothing to sneer at

no of course you shouldn't get a reverse mortgage thru some scammer wanting to add on invented fees, you go to a reputable bank/buyer as you would for any financial product

[Curmudgeoness]

30. Make sure that you know what a reverse mortgage is

before you jump right in there. That pool is full of alligators.

Someone posted an interesting link to Consumer Reports on this product at thread #18. Please do homework before you do this for yourself.

I cannot disagree with your opinion on inheritances. I have seen families split apart over simple things after a death. And that may be one reason some people do not want the parents doing reverse mortgages. But there is much more to it.

[Wounded Bear]

27. Next step....

"You, too, could trade in your house on a brand new Hoveround."

Sorry, guess I'm feeling the gallows humor today.

:shrug:

[annabanana]

29. You are betting that you'll die before the bank owns the house outright.

If you outlive your house, you'll be homeless in your most vulnerable years.

[demigoddess]

31. It is essentially a home equity loan, you pay interest on what

you borrow. Sometimes they talk you into 'investing' it in an annuity that pays less than you pay on the loan. Also, your heirs have to sell the house to pay off the loan, in other words, your heirs pay the costs of selling the house, and the bank gets their money, and if there is any left over then your heirs get something. But also you have nothing to tap into to pay for a nursing home etc. when you need it. NOT A GOOD DEAL AT ALL.!!!!! DO NOT DO IT UNLESS YOU ARE GOING TO DIE WITHIN THE YEAR!!!!

[lumberjack_jeff]

32. I plan to take it with me. n/t

[Shagbark Hickory]

33. Yet another way the banksters and corporations profit off our inadequate social safety nets.

[Paper Roses]

34. I have a RM and cannot think of a worse thing I ever did in my life.

Please, if you are considering one, take account of the initiation fees(exorbitant), the monthly monies they take from you, the declining value of your house. The list of 'don't do it' is long. The only way I see this working for anyone is if there are no heirs and you take the mortgage with plans to spend a big chunk of the equity before you die. BTW, the monthly interest on the RM is not deductible until the RM is paid off. There is no hope I will ever get out from under this monster.

Wish I never heard the words 'Reverse Mortgage'. Rip,off.

Plus, if you have to call them, no-one ever has then answer to your question. At least that is the case with my lender. It is always, "I don't have that information, you'll have to call 'XXX department between the hours of X and Y. I have left messages and have never been called back.