This past Sunday Parade Magazine published an article entitled "Beware of Reverse Mortgages."  The article was misleading on a number of fronts, but the biggest issue I have with the report is that it presented legitimate issues that a home owner should consider immediately beside fraud and discriminatory abuses that apparently exist. (Although the article did not provide any supporting documentation for its accusations of cited abuses.)

Parade Magazine should apologize for misrepresenting FHA Reverse Mortgages.

The article associated reverse mortgages with subprime lending. This association of legitimate issues involved with considering a reverse mortgage, with subprime lending and with predatory practices has misrepresented what is a good loan option for many seniors. As a result Parade has probably done a serious disservice to those seniors.

The use of phrasing such as "strapped US homeowners" inaccurately places the reverse mortgage option in language associated with the housing and financial market collapse.  In fact a reverse mortgage is not possible for most "strapped US homeowners" as the equity requirements pretty much exclude many of the circumstances that might make a homeowner strapped.

The article states "consumer advocates have long cautioned that reverse mortgages should be a last resort because of their high fees." This statement is made without citing the source. Further, it presents a comparative judgment as a fact, without even the least attempt made to provide supporting information for comparison.

Finally as I stated initially, the most gross violation of responsible reporting is that the legitimate issues to consider in the decision about a reverse mortgage are tied directly to non specific cases of illegal fraud and discrimination. One specific illegality mentioned has to do with coercision to execute a title transfer.

In actuality, such a practice has nothing to do with a reverse mortgage.

No reference is given. There is a vague mention of the FBI and HUD, but there are no specifics.

No verifiable statistics are given.

The writer simply uses emotionally loaded language - scam artists, unscrupulous loan officers, aggressive tactics, defrauding, scheme, steered.

Parade Magazine should issue an apology to the nation for its misrepresentation of an important loan option available to seniors and take full responsibility for its irresponsibly unbalanced and misleading presentation  - omitting relevant facts and actual comparisons, associating legitimate considerations with predatory and illegal activity, failing to cite sources and supporting facts.

Here is a link to the Parade Magazine article.

Some facts about a reverse mortgage.

• there is no title transfer of home ownership
• the home must have enough equity to qualify
• the senior does not have a monthly house payment to make
• closing costs that are supposedly high include costs that a traditional mortgage would pay in monthly installments
• the senior cannot outlive the loan or lose their home because of the loan terms
• the senior is guided in their decision by HUD approved housing counselors, not just the loan originator
• a link to the FHA FAQ for reverse mortgages

Here is a reverse mortgage calculator to find how much you might qualify for with a reverse mortgage.