Runaway Rumors Wrong Reverse Mortgages
Since most seniors aren't fully informed on the facts of reverse mortgages, having this knowledge places you in a small circle of educated people.
A fair amount of seniors only know what they heard through the grapevine: Sisters husband, who heard from his dads friend, knows a guy who lost his house to the bank, all because he had a reverse mortgage.
Some dont know a thing about them other than what this guy they overheard at the coffee shop was saying. He talked about his brother who knew someone who had a friend with a reverse mortgage. The bank took this friends house and he had to live on the street.
This is a certifiable fact: Too many people speak without knowledge regarding the reverse mortgage. And moreover, too many people listen and take the face value of these uninformed individuals.
A few people were taken advantage of in the reverse mortgage business.
One of the biggies here in Texas was a senior would go to their estate planning company and ask them for advice on a financial matter. The estate planner would refer the customer to his buddy down at the reverse mortgage company.
Because of the financial interest in referring the individual to a reverse mortgage company, they may not have the customers best interest at heart.
Thanks to current laws (such as those under the Real Estate Settlement Procedures Act) and senior advocacy groups, the kind of example above is no longer possible. Being taken advantage of is difficult with so many people on the lookout for you.
It is still up to you to make sure a reverse mortgage is the way to go. A lender will not always be forthright in telling you what is in your best financial interests.
But dont panic. Anyone who is going through the process of getting a reverse home loan will have to meet with an approved Housing and Urban Development (HUD) adviser, before continuing with the reverse mortgage.
But even this has its checks and balances. All reverse mortgage borrowers are required to counsel with an approved HUD reverse mortgage counselor prior to moving forward with a reverse mortgage.
The counselor has nothing to gain by leading you one way or another. They are there to bounce questions off of and to check over your situation. If something is amiss you will be told what it is.
In closing, if you or someone you know is considering a reverse mortgage, do not take or offer advice on the subject until you've educated yourself to know the honest facts. From my experience the facts differ greatly from common folklore.
A fair amount of seniors only know what they heard through the grapevine: Sisters husband, who heard from his dads friend, knows a guy who lost his house to the bank, all because he had a reverse mortgage.
Some dont know a thing about them other than what this guy they overheard at the coffee shop was saying. He talked about his brother who knew someone who had a friend with a reverse mortgage. The bank took this friends house and he had to live on the street.
This is a certifiable fact: Too many people speak without knowledge regarding the reverse mortgage. And moreover, too many people listen and take the face value of these uninformed individuals.
A few people were taken advantage of in the reverse mortgage business.
One of the biggies here in Texas was a senior would go to their estate planning company and ask them for advice on a financial matter. The estate planner would refer the customer to his buddy down at the reverse mortgage company.
Because of the financial interest in referring the individual to a reverse mortgage company, they may not have the customers best interest at heart.
Thanks to current laws (such as those under the Real Estate Settlement Procedures Act) and senior advocacy groups, the kind of example above is no longer possible. Being taken advantage of is difficult with so many people on the lookout for you.
It is still up to you to make sure a reverse mortgage is the way to go. A lender will not always be forthright in telling you what is in your best financial interests.
But dont panic. Anyone who is going through the process of getting a reverse home loan will have to meet with an approved Housing and Urban Development (HUD) adviser, before continuing with the reverse mortgage.
But even this has its checks and balances. All reverse mortgage borrowers are required to counsel with an approved HUD reverse mortgage counselor prior to moving forward with a reverse mortgage.
The counselor has nothing to gain by leading you one way or another. They are there to bounce questions off of and to check over your situation. If something is amiss you will be told what it is.
In closing, if you or someone you know is considering a reverse mortgage, do not take or offer advice on the subject until you've educated yourself to know the honest facts. From my experience the facts differ greatly from common folklore.
About the Author:
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posted by Credit Counseling at
5:11 PM
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