Seniors 100% At Risk Getting a Reverse
Mortgage without Professional Financial
Advice

If you have a REVERSE MORTGAGE or know anyone who does please
have them contact me immediately at 805 402-3066 or
sandy@elderfinancialterrorism.com

The Government defines a Reverse Mortgage as a “COMPLEX FINANCIAL
TRANSACTION” in the required disclosure in every reverse mortgage contract
called “Important Notice”.  

If you understand this IS the definition and follow the instructions and information
in the “Important Notice” this is what will happen:  You would get professional,
competent, independent financial and/or legal advice to understand this complex
financial transaction, the binding legal documents, the important financial and
legal implications, the terms and their (lifelong) effect and would be able to make
a conscious and informed decision on the suitability of a reverse mortgage to
meet your retirement goals for your financial security.  

Below is the link to the Important Notice in my parents loan application.

IMPORTANT NOTICE

There is only ONE REASON/PURPOSE to get a reverse mortgage:  For use as
part of your financial strategy, to meet your financial goals (long term), and
provide financial security through your retirement.    

If a reverse mortgage does not meet this purpose do not get it.

TIP:  Explore all your homeowner options before making a decision:
    
     Lease you Home
     Sell your Home
     Refinance your current mortgage
     Get a Line of Credit
     Family Loan
     Rent a portion of your Home

Once you explore all your options choose the one that makes the best financial
sense for your situation. Be open to making the best decision for your financial
wellbeing.

1.       The Lender's role is to provide you information and education about
reverse mortgage products, the amount of funds you can get from your equity,
funding options - lump sum, monthly income, line of credit or a combination of
these options.  They educate and guide you on the reverse mortgage process.  
The lender does not give you any advice and is not qualified to give you any
advice.  The Lender has no responsibility or fiduciary duty to the borrower.

2.       The HUD Counselor's role is education and information on the reverse
mortgage process.  The counselor's use of the new Financial Interview Tool (FIT)
gives the borrower the illusion they are receiving the necessary financial and
legal advice because the counselor ask you financial and legal questions such as
income, expenses, assets. They tell you alternatives to a reverse mortgage such
as refinance, sell, line of credit.  BUT legally the HUD Counselor cannot give any
advice (including financial and legal).   The HUD Counselor has no responsibility
or fiduciary duty to the Borrower.    

There are fundamental differences between a traditional forward mortgage and a
reverse mortgage, a few are:

  • Reverse Mortgages are only sold to those 62 and older
  • The contract, terms and consequences have a Lifelong Impact
  • You lose your traditional Homeowner's Rights.
  • The Lender or Counselor have absolutely no responsibility or fiduciary
    duty,
  • Interest is compounding on the fees, costs, loan, and mortgage insurance
    and eats up the remaining equity at an astonishing rate.
  • There are no consumer protections, no agencies to get help from, no
    enforcement or oversight of the minimal regulations there are, and no
    recourse once signed.
  • The % of equity you take in a reverse mortgage is almost a guarantee that
    you are selling your home to the lender for that amount.

The risk to the senior is life altering. You risk losing your property, equity,
retirement, quality of life and everything you worked for all your life - at the time in
life you can least afford to make a financially devastating mistake and are least
able to recover.  GET A SECOND OPINION FROM A QUALIFIED FINANCIAL
ADVISOR OR INDEPENDENT REVERSE MORTGAGE SUITABILITY ADVISOR.  
That way your decision will be based on the facts, consequences, costs and
benefits for your circumstances.

Most of us have seen ads that claim reverse mortgages are FHA insured making
them safe for the consumer.  Actually, the borrower pays a huge mortgage
insurance premium that protects the lender and ensures they will recover 100%
of the loan, fees and costs. In fact, if the sale of your home isn't enough to repay
the loan, interest and costs the Lender will submit the loan to FHA for the
balance.  The Lender is never at risk.

The reverse mortgage industry received  subsidies of $700,000,000 in FY 09
and $800,000,000 in FY 10 - that is 1.5  billion in taxpayer subsidies in two years
to provide full repayment of reverse mortgage loans to the lender.   These are
loans already defaulted, foreclosed and property sold that have left seniors
homeless, helpless, on public assistance if they are not deceased.
 In 2013 the
FHA reverse mortgage insurance fund is 2.8 billion in the red.  FHA took a 1.7
billion dollar bailout from Treasury in the fall of 2013


Are you aware there are "17 Triggers" that cause default and foreclosure?  
There have been approximately 775,000 reverse mortgages sold.  In an HUD
audit report in 2011 there were an astonishing 49,000 reverse mortgages in
default for one of those "Triggers" nonpayment of taxes, insurance.  Every one of
those borrower's signed a disclosure and acknowledged they would pay their
taxes and insurance but without planning and use as a tool for financial security -
how will that happen once the reverse mortgage funds are spent and you can't
access any further equity in your home?.  

Until all reverse mortgages are sold with the involvement of a Professional
Financial
and/or Legal Advisor this problem will continue to mount with no help for
vulnerable senior victims and the taxpayer on the hook to bail out the lenders.

Of course there is absolutely no motivation to determine the suitability or
consequences to the borrower.  The Reverse Mortgage Industry spends millions
of dollars lobbying against any regulation.   They spend millions more fighting
everyone who dares to file a lawsuit.

Having said all of this - I am not against Reverse Mortgages. I advocate
for the borrower's best interest first.  A reverse mortgage sold to
Seniors who understand the long term consequences and costs, have
the Advice of a Financial Professional are able to make a conscious
informed choice about the suitability of the product for their unique
circumstances.  
Reverse Mortgage Consumer Advocate