A question not asked in this video with Ted Lange, a reverse-mortgage specialist for Wells Fargo:
Does the loan balance go up? Answer:
Yes, the interest payments are tacked on, based on today’s 30-year fixed rate (which is 5.06%):
Jim Klinge
Klinge Realty Group
Broker-Associate, Compass
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Thanks for exposing another form of elder abuse.
Another? What was the first one?
Check out the AARP lawsuit on behalf of reverse mortgage borrowers (I’m no fan of AARP politics)HOWEVER….AARP does make a point in these cases. Apparenty only one spouse would be encouraged to sign the loan docs in order to obtain a larger loan amount. When that spouse passed away, the remaining non-signatory spouse was stuck with full payoff of the reverse mortgage. There was no disclosure made regarding the payoff requirement of the remaining spouse. Google it.
These loans could really help some people, either purchase or refi.
Ted and I would like to give some exposure to the product so people know they’re available, and provide a specialist to speak with so you don’t get burned.
But you can’t wait to be the anonymous commenter to complain because you read about the lawsuit about how some unscrupulous mortgage brokers took advantage of people – none of whom are part of this presentation.
And you could have tried to explain your concerns, but no, just drop the bomb, “Thanks for exposing another form of elder abuse.”
Ted and I are not conducting elder abuse.
When you make comments like that, they spoil it for other readers – some of whom might really need the information.
Reverse mortgages are just like any other type of mortgage. What I mean by that is; do your homework! Yes, I can google “bad reverse mortgages” and come up with some awful stories. I can also google “bad mortgages” or “bad mortgage brokers” or “bad realtors” and also come up with plenty of stories.
Make sure you understand all the documents you are signing. My parents used a reverse mortgage to buy their last home and it worked out great for them.
Why do I think “interest only ’till you die” when I hear this guy talking about it.
Sorry, I meant “negative amortization ’till you die”.
In the case of a married couple where only one is on the mortgage does the other spouse have to sign a document stating the implications of this? I have read that in some areas this is required. If one required that the other spouse had a notarized signature then they could not say they had not been told of the issue. Its just like if you are married and apply for a pension, you have to get your spouses consent to apply for other than a joint and survivor pension.
If they later say the were not told, you have a document that says otherwise.
HECMs (Home Equity Conversion Mortgages, aka reverse mortgages) are just another affordability product with a very specific target group (62+, lots of equity). The community bank I work for in Portland offers them, and there’s a tremendous amount of counseling required, not only with the borrower, but also with the borrower’s family–so that everyone is fully aware of how the HECM works. I’m sure that Mr. Lange at WFB is required to do that as well.
You might have done a better job explaining what the hell it is. If I didn’t know, I sure couldn’t figure it out from this video. I would know that if I’m moving out of a house to a smaller house, it would help me, but I wouldn’t really know how.
This is my life here.
Spend countless hours providing information you can’t find anywhere else, just so people can tee off on me.
I must be out of my mind.
I have 65 people on the black-list, which means if they comment again, it goes straight to spam, and not visible. Yet there are still plenty of folks that are happy to crack on JtR – do you not have anything better to do with your life?
JtR, you do a great service with this blog. You do, however, need to have hide like a rhinoceros to take the inevitable rude comments and the trolls.
There is a place for reverse mortgages, but like anything else, they aren’t for everyone. The heirs tend to view them negatively, since they reduce the estate that the old folks will leave. Of course, the heirs won’t fork over living expenses for the oldsters for a few years to preserve the estate, so why should anyone have much sympathy for the heirs?
JTR#11 – “I must be out of my mind!” — Agreed!
But buyers are better off because of it…
Unfortunately our society has got to the point where there are unscrupulous people in almost every industry and particularly real estate which i think may cause people to be ultra skeptical and miss out on gems like this blog. Combine that with the anonymity of the Internet and the problem is accentuated. I don’t know if the detractors realize how much work this blog must take
Here is a little more background on how I became a Reverse Mortgage Consultant…My wife and I moved to Carlsbad in 2007 to retire and for the first 3 years we leased a home. In august of 09 I learned about a new product from Wells Fargo called a Reverse Mortgage Purchase. In Nov of 09 we found a bank owned home that we really liked. it had all of the bells and whistles we wanted for $500k (in 2006 the house sold for $725k) I compared paying cask, Finance with $200,000 down paymnet and a $2,500 monthly paymnet to using a Reverse Mortgage Purchase with $200,000 down and no payments as long as I lived in the home.
I am a numbers guy, for 35 years I was a Certified Financial Planner so I looked at the cost every way I could and the Reverse Mortgage Purchase was the best way to go. I was able to hang on to my cash and have no payments as long as I live in the house.
Acording to my calulations if the house appreciates at an average of 4% a year I will have a small growth in my equity if I live another 20 years. In addition I have the use of the $30,000 in payments for 20 years ($600,000) In this economy it worked for us. I was 68 when I bought the house.
Based on my good experience and all the bad things I had heard about Reverse Mortgage’s I decided to become a Reverse Mortgage Consultant to work with seniors like myself and tell the true story based on my first hand experience
I am a realtor in Eugene, Oregon. I think the reverse mortgage purchase is great concept for the right person/buyer. I recently was able to help a client out using a reverse mortgage purchase. http://bit.ly/idwFQI It was a success story. Not for everyone, but a great tool for the right reason!