Reverse Mortgage Sham.

[ralpieE]

This is only for those who have no relatives. As long as you pay the taxes, you stay. When you kick (if relatives, children), they get nothing. The contents of the house stay with it.

One is better off selling the place, banking the dough, and getting an apartment.

 

[sluggo72]

This is only for those who have no relatives. As long as you pay the taxes, you stay. When you kick (if relatives, children), they get nothing. The contents of the house stay with it.

One is better off selling the place, banking the dough, and getting an apartment.

depends how you look at it. You sell off the place, rent an apartment, and need the dough to live, what do the children get? Same as a reverse mortgage. Really if you take a reverse mortgage, and know the contents stay, why would you keep any that matter?? Just give them away to the kids now so they can use them.
or if this really worries you, why not have the parents take out a 1st mortgage (they cant be denied due to age) and spend down the money? amounts to the same thing. When they kick, the kids have the house with a mortgage, but flexibility. they can sell the house, pay off the mortgage and go on if they like. Not really that different, except who bares the risk of the value of the house? Reverse mortgage the bank does, traditional mortgage the kids do.

 

[spud358]

This is only for those who have no relatives. As long as you pay the taxes, you stay. When you kick (if relatives, children), they get nothing. The contents of the house stay with it.

One is better off selling the place, banking the dough, and getting an apartment.

Sounds like you need a better estate attorney.... Banks don't take or own the house when the reverse mortgage borrower passes away. The heirs own the house, but must repay the the balance of the loan as well as the taxes, insurance, etc. This is often done by selling the house, but if they chose to keep the house, there are options. Either way, as soon as mom passes away, the house (and the debt from the reverse mortgage) belongs to the heirs. There is nothing preventing you from going to the house and taking anything you want from the house. It's YOUR house at that point. Further, the loan is a "non-recourse" loan meaning that the bank can ONLY look to the property for repayment of the loan. That is, if the loan amount is $100,000, but the house sells for $90,000, you are not responsible for the difference of $10,000. The bank can file a HUD claim to try an get it from insurance, but you are not on the hook.

Where are you getting that the bank took the house and all the contents???

 

[ralpieE]

Sounds like you need a better estate attorney.... Banks don't take or own the house when the reverse mortgage borrower passes away. The heirs own the house, but must repay the the balance of the loan as well as the taxes, insurance, etc. This is often done by selling the house, but if they chose to keep the house, there are options. Either way, as soon as mom passes away, the house (and the debt from the reverse mortgage) belongs to the heirs. There is nothing preventing you from going to the house and taking anything you want from the house. It's YOUR house at that point. Further, the loan is a "non-recourse" loan meaning that the bank can ONLY look to the property for repayment of the loan. That is, if the loan amount is $100,000, but the house sells for $90,000, you are not responsible for the difference of $10,000. The bank can file a HUD claim to try an get it from insurance, but you are not on the hook.

Where are you getting that the bank took the house and all the contents???

Read the prospectus. We own our home outright. Why would I borrow against it? It's asinine. Do you think the bank is giving you something for nothing? They map the contents. So like sluggo said, if you can give the contents away beforehand so be it. But what if the kids or whomever don't want it at that point, or perhaps you still use many of the contents.

Sham.

 

[zwick99]

Read the prospectus. We own our home outright. Why would I borrow against it? It's asinine. Do you think the bank is giving you something for nothing? They map the contents. So like sluggo said, if you can give the contents away beforehand so be it. But what if the kids or whomever don't want it at that point, or perhaps you still use many of the contents.

Sham.

Cash. Not everyone can afford to stay in a home they own outright.

 

[spud358]

Read the prospectus. We own our home outright. Why would I borrow against it? It's asinine. Do you think the bank is giving you something for nothing? They map the contents. So like sluggo said, if you can give the contents away beforehand so be it. But what if the kids or whomever don't want it at that point, or perhaps you still use many of the contents.

Sham.

You are making no sense. When the borrower dies, the heirs own the house (and the debt from the reverse mortgage loan). If you want the contents you just go get them. The bank doesn't own the house nor it's contents unless you (the heir) defaults on it, which is at least 6 months after the original borrower dies.

I'm not sure why you are posting here, but you are posting incorrect information. If you are seeking advise, I STRONGLY recommend to speak to an estate attorney because you don't seem to understand the basics. I assure you, the bank is not taking the contents of the house from you if you want them.

If the kids don't want it they can sell the house, settle the reverse mortgage loan, and be done with it. I strongly urge you and anyone else reading your post to speak with their estate attorney before taking anything posted here as fact. A reverse mortgage is an option for people who want or need to leverage the equity of their home without selling it. For some people that makes good sense, but again, your estate attorney is your resource before making any decisions on what makes the most sense for your specific situation.

 

[ralpieE]

You are making no sense. When the borrower dies, the heirs own the house (and the debt from the reverse mortgage loan). If you want the contents you just go get them. The bank doesn't own the house nor it's contents unless you (the heir) defaults on it, which is at least 6 months after the original borrower dies.

I'm not sure why you are posting here, but you are posting incorrect information. If you are seeking advise, I STRONGLY recommend to speak to an estate attorney because you don't seem to understand the basics. I assure you, the bank is not taking the contents of the house from you if you want them.

If the kids don't want it they can sell the house, settle the reverse mortgage loan, and be done with it. I strongly urge you and anyone else reading your post to speak with their estate attorney before taking anything posted here as fact.

Read on.

http://www.nolo.com/legal-encyclopedia/reverse-mortgage-scams.html

 

[kgilbert78]

Since when has *any* kind of mortgage included the contents. I'm baffled.

 

[ralpieE]

I know exactly what I'm talking about. My in-laws in their 80s have friends who looked into them. The contents stay. The loan and associated charges often quickly exceed the original loan. You're only screwing your heirs.

More:

http://www.nytimes.com/2012/10/15/b...es-costing-some-seniors-their-homes.html?_r=0

 

[ralpieE]

Since when has *any* kind of mortgage included the contents. I'm baffled.

Get the prospectus and read it carefully.

 

[spud358]

Read on.

http://www.nolo.com/legal-encyclopedia/reverse-mortgage-scams.html

where does it say that the bank gets the house and contents? This is simple so I'm not sure where your having trouble. When the borrower dies, the house is transferred to the heirs. They then own the house, all the contents, and whatever the balance is on the loan. They can chose to keep the house by paying off the loan themselves either through cash or other means (i.e. mortgage) or they can sell the house. At NO POINT is the bank taking the contents or preventing the heirs from taking the contents. I really have no idea what you are talking about.

 

[ralpieE]

where does it say that the bank gets the house and contents? This is simple so I'm not sure where your having trouble. When the borrower dies, the house is transferred to the heirs. They then own the house, all the contents, and whatever the balance is on the loan. They can chose to keep the house by paying off the loan themselves either through cash or other means (i.e. mortgage) or they can sell the house. At NO POINT is the bank taking the contents or preventing the heirs from taking the contents. I really have no idea what you are talking about.

Read the articles. Then get the prospectus from a lender. It's there.

 

[kgilbert78]

I know exactly what I'm talking about. My in-laws in their 80s have friends who looked into them. The contents stay. The loan and associated charges often quickly exceed the original loan. You're only screwing your heirs.

More:

http://www.nytimes.com/2012/10/15/b...es-costing-some-seniors-their-homes.html?_r=0

The Times article does not say that the contents stay. Sounds like a scam to me.

 

[ralpieE]

The Times article does not say that the contents stay. Sounds like a scam to me.

Read above. My in laws know people who looked at this and backed off. The contents stay.

 

[spud358]

I know exactly what I'm talking about. My in-laws in their 80s have friends who looked into them. The contents stay. The loan and associated charges often quickly exceed the original loan. You're only screwing your heirs.

More:

http://www.nytimes.com/2012/10/15/b...es-costing-some-seniors-their-homes.html?_r=0

The heirs don't "get screwed" because before they enter into a reverse mortgage in the first place they should understand what that means and the ramifications. If you fail to retain a competent estate attorney and/or financial planner that's no one's fault but your own. The contents do not stay, that's just incorrect and you need to stop repeating it. I'm not even sure what you mean with "the contents stay". The heirs own the freaking house and can go there and take anything they want out of the house, have an estate sale, or throw it all away if they want. You in-law's friends are getting bad advice or are being sold an actual scam.

Also, ALL charges and fees exceed the original loan amount.... If you are aware of 0% loans, please let me know ASAP! Why do you think it costs nearly $400,000 to pay off a $230,000 loan over 30 years? That's how borrowing money works....

 

[spud358]

Read above. My in laws know people who looked at this and backed off. The contents stay.

Good God. If they are being told the "contents stay" that is not a reverse mortgage and is an obvious scam. I've explained 3 times how these work and the laws backing that. You continue to ignore that. Please cite something, anything, other than a 3rd hand story from 80-somethings that even suggests the bank takes the house when the borrower dies. That's against the law. If they default on the loan, then yes the bank takes the house, just like any other loan default.

 

[mn78psu83]

The Times article does not say that the contents stay. Sounds like a scam to me.

I'd have to agree that the part concerning the contents is a true scam. Seems to me one of the most practical issues for the estate debt repayment is that the time it takes to settle an estate might be greater than the time allowed to repay the reverse mortgage.

 

[spud358]

The Times article does not say that the contents stay. Sounds like a scam to me.

That's because they don't. This gentlemen needs to speak to an attorney for advice, not anecdotal stories from 80-somesthings who may or may not be getting illegally scammed.

 

[pmjoe]

Are you really talking about a bank mortgage here? There are a number of long-term care paths for the elderly where if the costs of care exceed what the individuals can pay the entire estate is put up to cover the costs. Medicaid has asset transfer rules. But those aren't mortgages.

 

[ralpieE]

Get a line of credit. We've done it 2x. Do they look at the outside of the house first?

They want to know where you're employed. They go through the house. They ask about "other" valuables..stocks, coin collections, gun collections etc.

Then they look at the house over last.. And that's a bank.

 

[spud358]

I'd have to agree that the part concerning the contents is a true scam. Seems to me one of the most practical issues for the estate debt repayment is that the time it takes to settle an estate might be greater than the time allowed to repay the reverse mortgage.

This can be an issue, but again, this is something that people and their heirs need to understand BEFORE seeking such a loan. Federal regulations do provide 30 days to the heirs to decide what they want to do with the property and up to 6 months to arrange financing. If people retain the appropriate professionals they should understand what happens and be prepared for it. I've read all the main stream media articles about people "getting screwed" and most of the time it's a matter of them not being properly informed, which can be avoided with a good attorney. That said, there are actual scams out there and it seems that this fellow came across an actual scam and is trying to suggest that all reverse mortgages fall under that same category. If they are taking the house and the contents immediately, the lenders are breaking federal law.

 

[johnsonguy45]

Judging that this is pnnylion........there's no rhyme or reason to what he posts, and it doesn't surprise me that he (or someone related to him) falls for a scam.

 

[Aoshiro]

Get a line of credit. We've done it 2x. Do they look at the outside of the house first?

They want to know where you're employed. They go through the house. They ask about "other" valuables..stocks, coin collections, gun collections etc.

Then they look at the house over last.. And that's a bank.

I agree with what others have said. You are either dealing with some seriously shady people who should probably be reported to your state's Attorney General, or you are seriously confused about what a reverse mortgage is. If you have allowed anyone through your house or your parents house and they have asked you about your valuables, then you need to install a security system and report them to your local police.

I'm not a huge fan of reverse mortgages but for certain seniors in certain circumstances a reverse mortgage can be a way to keep them in the home they want to stay in. I'll be damned if I can understand why people think that their parents are obligated to leave them anything. The focus should be on keeping aging parents comfortable, not on ensuring that something is left for the heirs.

 

[ralpieE]

I agree with what others have said. You are either dealing with some seriously shady people who should probably be reported to your state's Attorney General, or you are seriously confused about what a reverse mortgage is. If you have allowed anyone through your house or your parents house and they have asked you about your valuables, then you need to install a security system and report them to your local police.

I'm not a huge fan of reverse mortgages but for certain seniors in certain circumstances a reverse mortgage can be a way to keep them in the home they want to stay in. I'll be damned if I can understand why people think that their parents are obligated to leave them anything. The focus should be on keeping aging parents comfortable, not on ensuring that something is left for the heirs.

That I can agree with. I have no need to deal with them. I know others who have. The Big Banks have gotten out. These people want to insure they're getting their money back.

Banks come in and do appraisals all the time. If you lose your employment, they want to insure they're getting the dough back.

 

[Aoshiro]

That I can agree with. I have no need to deal with them. I know others who have. The Big Banks have gotten out. These people want to insure they're getting their money back.

Banks come in and do appraisals all the time. If you lose your employment, they want to insure they're getting the dough back.

No appraisal of a home that you are financing should include any personal property under any circumstances. If an "appraiser" is asking you about valuables like jewelry or a gun collection there is something seriously wrong. When you take a mortgage (or reverse mortgage) on a home it should not place a lien on the contents. If someone is trying to sell that idea to you, then it is definitely a scam and you should contact the authorities. The only contents that should be included are major appliances like a refrigerator or stove.

 

[bdgan]

This is only for those who have no relatives. As long as you pay the taxes, you stay. When you kick (if relatives, children), they get nothing. The contents of the house stay with it.

One is better off selling the place, banking the dough, and getting an apartment.

• A reverse mortgage can be a good solution for somebody that needs a little extra income to stay in their house but they aren't for everybody.
• Reverse mortgages are highly regulated. Financial counseling is required as part of the application process.
  
• The maximum amount that a 62 year old person can borrow is 66% of the home value so it's pretty difficult for the mortgage to be a greater value than the house.
• I'm not sure where you cane up withe the "contents" thing.

 

[cjrugger]

Why on Earth are you guys trying to have a serious conversation with him?

 

[ralpieE]

• A reverse mortgage can be a good solution for somebody that needs a little extra income to stay in their house but they aren't for everybody.
• Reverse mortgages are highly regulated. Financial counseling is required as part of the application process.
  
• The maximum amount that a 62 year old person can borrow is 66% of the home value so it's pretty difficult for the mortgage to be a greater value than the house.
• I'm not sure where you cane up withe the "contents" thing.

Fee and charges pile up quickly. See the above articles.

 

[ralpieE]

Why on Earth are you guys trying to have a serious conversation with him?

Thanks for contributing to the subject.

 

[kgilbert78]

Get a line of credit. We've done it 2x. Do they look at the outside of the house first?

They want to know where you're employed. They go through the house. They ask about "other" valuables..stocks, coin collections, gun collections etc.

Then they look at the house over last.. And that's a bank.

Sure--they want to know your ability to pay. All assets are considered in that. But those assets do not automatically "go with the house" should you not be able to pay off the mortgage.

 

[kgilbert78]

• The maximum amount that a 62 year old person can borrow is 66% of the home value so it's pretty difficult for the mortgage to be a greater value than the house.

Well, given the mortgage crash of a few years back, I can see where it might happen after the fact. My own house dropped from $155K to about $120K in value. Of course that loss is only realized if I'd sold. But we were never underwater, thankfully, as we were smart enough (ok, Mrs KG was smart enough) not to buy beyond our means.

 

[spud358]

Well, given the mortgage crash of a few years back, I can see where it might happen after the fact. My own house dropped from $155K to about $120K in value. Of course that loss is only realized if I'd sold. But we were never underwater, thankfully, as we were smart enough (ok, Mrs KG was smart enough) not to buy beyond our means.

Smart guy. I'm 34 and have a number of friends who bought stupid expensive houses when they got their first promotion to a well paying job. These are people making in the 80k-120k range as a couple living in 400k houses. Makes no sense to me. My wife and I clear more that and live in a house we bought for $115k (plus $35K in renovations). Luckily we delayed buying until 2009 so we missed the bubble popping. I'll upgrade to a $400+k home when our income allows for that and we have enough equity in our current house to use as a substantial down payment keeping the mortgage until $1500k/month. Until then, our home suits us just fine and our mortgage is under $900/month allowing us to dump stupid money into college savings for our sons and retirement at a relatively young age.

 

[ralpieE]

Smart guy. I'm 34 and have a number of friends who bought stupid expensive houses when they got their first promotion to a well paying job. These are people making in the 80k-120k range as a couple living in 400k houses. Makes no sense to me. My wife and I clear more that and live in a house we bought for $115k (plus $35K in renovations). Luckily we delayed buying until 2009 so we missed the bubble popping. I'll upgrade to a $400+k home when our income allows for that and we have enough equity in our current house to use as a substantial down payment keeping the mortgage until $1500k/month. Until then, our home suits us just fine and our mortgage is under $900/month allowing us to dump stupid money into college savings for our sons and retirement at a relatively young age.

+1

Although I bought my house outright and still live in it. Worth 265K+ now.

 

[kgilbert78]

Smart guy. I'm 34 and have a number of friends who bought stupid expensive houses when they got their first promotion to a well paying job. These are people making in the 80k-120k range as a couple living in 400k houses. Makes no sense to me. My wife and I clear more that and live in a house we bought for $115k (plus $35K in renovations). Luckily we delayed buying until 2009 so we missed the bubble popping. I'll upgrade to a $400+k home when our income allows for that and we have enough equity in our current house to use as a substantial down payment keeping the mortgage until $1500k/month. Until then, our home suits us just fine and our mortgage is under $900/month allowing us to dump stupid money into college savings for our sons and retirement at a relatively young age.

I have the advantage of living in Columbus (yes, there *are* advantages), where the market is not as high priced as the East Coast. I'm in the city but in a suburban style neighborhood--and my house here is bigger than the one I grew up with in Warminster (which likely is worth over $300K by now). I expect to own outright by retirement.

 

[dawgduice]

This is only for those who have no relatives. As long as you pay the taxes, you stay. When you kick (if relatives, children), they get nothing. The contents of the house stay with it.

One is better off selling the place, banking the dough, and getting an apartment.

Amazing the "banking industry" involved in a sham ?? I think the odds on that are 100% !!!!
One of my all time favorites is "points" on a mortgage loan

 

[junior1]

Read the prospectus. We own our home outright. Why would I borrow against it? It's asinine. Do you think the bank is giving you something for nothing? They map the contents. So like sluggo said, if you can give the contents away beforehand so be it. But what if the kids or whomever don't want it at that point, or perhaps you still use many of the contents.

Sham.

my inlaws took out a reverse mortgage. They drew money from the house to live on, and when they wanted to leave, took what was remaining on the mortgage in cash, packed up their belongings and left the house. None of the heirs wanted it at that point and the bank took it over. Turned out to be a very wise financila decision for them.

Not everybody is in the same financial position obviously.

 

[Columbus_Lion]

HECMs are the better form of reverse mortgages. Gives the consumers a favorable way to obtain equity firm their house during retirement.