Fox News warns homeowners of reverse mortgages

Fred Thompson and Henry Winkler tout the benefits of reverse mortgages for seniors, but is it all good news?

According to Fox Business Network anchor Cheryl Casone the answer is an emphatic “no.” She tells Fox News co-anchor Martha MacCallum that a reverse mortgage may amount to a case of predatory lending.

The old adage, “if it sounds too good to be true, it probably is” may very well apply.

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  • Libertylady

    Once again, the ignoramuses are out in force. And I say this as a long-timer in the business who ran Bank of America's RM division for South Florida for three years.

    Reverse mortgages have been around since 1961, and the FHA-insured ones since 1986. They are heavily regulated and protected, and a godsend for many seniors. They are not the perfect product for every one, and I turned away business that was not int he senior's best interest.

    The people who have been in the business for a long time know that this is a 60-hour/week job, you have to love and honor the seniors, hold their hands in many cases, and always do the best thing for them. You visit them in their homes, talk to extended family members, attorneys, financial advisors, care givers, etc. It's VERY time-consuming if done properly.

    The seniors MUST be counseled by a HUD-approved counseling agency so they are aware of the nature of the loan and its long-term ramifications. Seniors also keep the title to their homes at all times, they never have to make a mortgage payment, don't have to qualify on income or credit, etc. Their heirs are protected against deficiency judgments. They can never owe more than the sales value of the home when the loan becomes due, which is not until the senior moves, does, or sells… even if he/she lives to be over 100. There is typically some equity left in the home because of the way the actuarials are calculated.

    There's more, but to be honest, this is the same old ill-informed, disinformational crap that I have been hearing for the last 15 years, and its just not true. Bizpac should do its homework before publishing this stuff.

    • Jerry Tomlin

      Thank you for caring enough to take the time to respond.

      Jerry Tomlin

      Certified Reverse Mortgage Professional

  • Jerry Tomlin

    I have a couple of issues with Cheryl Casone's report warning homeowners about Reverse Mortgages. Starting with the Host commenting that she thought 57,000 people was a large number to be having problems with this program. Relative to what? Does she know the number of Reverse Mortgages that have been written since 1989? Is it as large as the number of foreclosures across the Country in this month alone? Her report is correct that a homeowner or their spouse, who is not yet 62 at the time of the loan, cannot be on the Title to the home. All of that is covered and reviewed through counseling mandated and licensed by the FHA. In her example, she explained that when the borrower passes away the younger spouse is "kicked out"; the phrasing is a quit harsh. What truly happens is the widow or widower is given up to one full year to either sell the home or refinance it to pay off the Reverse Mortgage. This is unlike any other type of mortgage available. If the spouse passed away and they had a Home Equity Line of Credit in place, which Ms.Casone offered as an option, the bank would want payment right away since the note is not in the living spouse's name. How easy is it for a retired couple of 72 – 75, with only social security or a small pension to get qualified for a mortgage these days? Well, caulk up another advantage for the Reverse Mortgage. There are no income requirements, you simply need to stay current on your taxes, homeowner's insurance and routine maintenance. How about those seniors who use this loan program to pay off their existing mortgage so they can remove the debt burden and increase their monthly available cash for other expenses or savings? Do you think for one minute that former Senator Fred Thompson would risk his repetition if he thought the product was detrimental to seniors? In fact did you know that he got involved with Reverse mortgages while researching the program for his Mother? ABC News recently posted a poll on their website inviting anyone who had been "harmed" by a Reverse Mortgage to fill out a form and submit their story. Why not ask for feedback from users of the program and let the good and bad balance themselves out. I admit that there are some bad stories out there; unethical loan officers, greedy children, greedy 2nd or 3rd spouses but most of all poor financial planning puts the majority of these folks on the path to far greater disaster than a Reverse mortgage.

  • Jeanne Barber

    Wayne Rogers is also promoting these mortgages.

  • http://www.thepinkflamingoblog.com/ SJ Reidhead

    My parents have one. Sure, I am concerned about the property once they are gone, but the actual amount of the final mortgage, will be, for us, about half the value of the property. I have fantasies of paying down the mortgage, if possible, so that we can keep the property. If not, we have a year to settle the estate and sell the property. It isn't perfect, but it's not that bad, either. I am beginning to think that FOX Tabloid News is completely against anyone but the ultra wealthy.

    SJR

    The Pink Flamingo

  • http://www.overlandwithkids.com/2010/10/pandas-at-chengdu-the-shu-kingdom-and-the-worlds-largest-bud dental implants cost

    An impressive share! I have just forwarded this onto a friend who had been conducting a little homework on this.

    And he actually bought me breakfast because I stumbled

    upon it for him… lol. So allow me to reword this.

    … Thanks for the meal!! But yeah, thanx for spending the time to discuss this issue here on your

    blog.