Since most seniors aren't fully informed on the facts of reverse mortgages, having this knowledge places you in a small circle of educated people.
That puts you in the minority. Most seniors have very little idea of what a reverse mortgage actually is.
Some dont know a thing about them other than what this guy they overheard at the coffee shop was saying. He talked about his brother who knew someone who had a friend with a reverse mortgage. The bank took this friends house and he had to live on the street.
In the business of reverse mortgage, there were some persons who were taken advantage of.
A common happening in the state of Texas was, if asked for financial guidance, estate managers would send customers to a friend of theirs, who so happened to be a reverse mortgage lender.
When the escrow closed, the statement would show a fee charged to the senior, sometimes up to ten thousand dollars, for the consultation of the estate planner.
Since the estate planner was paid from the referral, they were not always just serving the needs of the client.
Thanks to current laws (such as those under the Real Estate Settlement Procedures Act) and senior advocacy groups, the kind of example above is no longer possible. Being taken advantage of is difficult with so many people on the lookout for you.
Can this still happen? No. It is now against the law. RESPA laws and every senior watchdog group you can name keeps a close eye on the reverse mortgage industry, its hard to really get taken anymore.
But you are still not on your own, because all persons wanting a reverse mortgage must meet with a counselor, HUD approved, before proceeding with the loan.
This adviser will tell you the honest truth because there is nothing in it for them. They are there to guide, and if your outlook isn't the best based on what youve chosen to do, they will shout it from the rooftops.
The counselor has nothing to gain by leading you one way or another. They are there to bounce questions off of and to check over your situation. If something is amiss you will be told what it is.
You may be considering or your know someone who is considering a reverse mortgage. Everyone seems to have an opinion. Some are based upon the facts, but most are total hogwash. Get your facts straight before you form your opinion.