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Reverse Mortgages (again)

By Terry Kuehn

Real Estate Agent with Family Real Estate Services, Inc.

June 30, 2009 05:01 AM

This is not the first time I've posted regarding reverse mortgages; and it looks like I'm not the only one who's been envisioning nightmares regarding these things.

I wonder just how many individuals in the mortgage business would arbitrarily recommend reverse mortgages to their own family members, both horizontal and lateral?

With the fallacies of human behavior being what they are, and what with the historical American Way of Life being what it is, hard core financial common sense is often found to be wanting....

Here's a few links to just two articles I came across this morning:

http://www.kansascity.com/news/politics/story/1295695.html

McCaskill holds hearing in St. Louis suburb on reverse mortgages

"Reverse mortgages, increasingly used by seniors to help fund retirement or pay unexpected medical bills, are often accompanied by excessive fees and marketed using overly aggressive tactics, Sen. Claire McCaskill said Monday."

http://www.housingwire.com/2009/06/29/industry-warns-senate-on-reverse-mortgages/

Industry Warns Senate on Reverse Mortgages

"The US Senate Special Committee on Aging heard testimony today regarding the benefits - and potential drawbacks - to reverse mortgage products available to seniors."

...and there's more out there.

Re-Blog

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Sara Woolford & Steve Golson, ALHS

iTexas Realty Co. - San Antonio, TX

Just came across your post while cheking past comments on the Retirement Planning group. Every time I hear the phrase :reverse mortage" my mind converts it to "SCAM" Am I wrong, or is not just another "lending product" our trusty reliable lenders have invented to make obscene profits off of people who don't know better? Another wealth-redistribution scheme to 'take from the poor and give to the rich'? -steve

Dec 22, 2009 04:32 PM

Terry Kuehn

Family Real Estate Services, Inc. - Tacoma, WA

Self-Directed Roth IRA Associate

Steve, thank you for reading this post and, respectfully, for responding to it.

Call me 'gunshy,' or whatever, but if you GOOGLE "reverse mortgages," chances are that the AARP webiste will pop up in first position directly after the 'Sponsored Links' sites. Simply click on that link and see what that little instituion has to say about reverse mortgages.

In summation, may I please reiterate something that I wrote in the post you responded to:

"I wonder just how many individuals in the mortgage business would arbitrarily recommend reverse mortgages to their own family members, both horizontal and lateral?"

Additionally, I will add the following:


Value of the home	200000
Available principal limit	90400	0.452

Less service fee set-aside	4656	0.052	0.052
Available principal limit	85744	0.948

Less Financed Items
Loan origination fee	4000	0.047
Mortgage insurance	4000	0.047
Other closing costs	5115	0.060	0.153
Total fees and costs			0.204

Net principal limit	72629	0.363	Net LTV

Dec 23, 2009 10:54 AM

Reverse Mortgages (again)

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Terry Kuehn

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