| Seniors At Risk Obtaining a Reverse Mortgage without Professional Financial Advice |
Our senior population is under attack by the predatory lending practices of the Reverse Mortgage Industry. We are all bombarded with Celebrity Ads, Print Media, "Free Lunch" Seminars and the Internet telling us of the "benefits" of a reverse mortgage. What we don't hear are the consequences and outcome for our financial security and wellbeing. A Reverse Mortgage defined by law is a complex financial transaction. The lender, salesperson and mandatory HUD counseling have no responsibility, liability, or Fiduciary Duty to the borrower. You are 100% at risk of losing your home and equity without a professional financial advisor who can determine the suitability and risks for your unique circumstances. Expecting the Borrower to understand a reverse mortgage and the financial and legal consequences on their own is like asking someone to invest their life savings in derivatives or equities without Financial advice. CONSUMER WARNING: The most important fact and first thing you have to figure out is "What are the LONG TERM Consequences for your unique circumstances". Once you know the consequences you can look at the application of a reverse mortgage..There are two critical elements any borrower (of a reverse mortgage) must understand. Your Financial Wellbeing and Quality of Life Depend on it! 1. YOU (Senior Borrower) have the sole responsibility to determine if a reverse mortgage is a suitable financial solution and what the long term consequences will be for your personal, financial, & health circumstances, and long term need.. 2. YOU (Borrower) MUST have the advice of a Professional Financial Advisor who understands the substantial consequences of a reverse mortgage for your long term financial strategy and security. There are fundamental differences between a traditional forward mortgage and a reverse mortgage that you need to consider:
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. Your decision to get a reverse mortgage better be based on the facts, consequences, and costs because there is no turning back once you have a reverse mortgage. Most of us have seen ads that claim reverse mortgages are FHA insured making them safe for the consumer. Borrower beware because the FHA insured reverse mortgage program protects the lender and ensures they will recover 100% of the loan, fees and costs. In case you don’t believe this could happen to you or someone you care about you are very mistaken. 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. Are you aware there are "17 Triggers" that cause default and foreclosure? 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? Until all reverse mortgages are sold with the involvement of a Professional Financial 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. Required HUD Counseling gives the illusion of "financial and legal advice" however; legally they cannot give any "advice" whatsoever. The purpose of counseling is information and education of the borrower. 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 want you to know 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
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| I offer a FREE consultation to potential borrowers and borrower's in trouble who have reverse mortgages. I can help you understand what you need to know and do before getting a reverse mortgage. If you already have a reverse mortgage we can identify your options. the free consultation. Go to my contact page. |