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Old 03-25-2012, 07:59 AM
 
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Hmm a development probably not unexpected and one we have discussed previously.

A Troubling Housing Misstep By Boomers - Forbes

Quote:
Who’s falling for reverse mortgages these days? Leading edge baby boomers, aged 62 to 64. They represent more than one out of five (21%) applicants, compared to only about 6% in that age group back in 1999, according to a new report by the MetLife Mature Market Institute. Almost half of applicants were under 70, double the percentage in that age group in 1999.
I suspect that part of it is to grab the equity while it is still there. If folks are falling for some of the other fear based investment strategies and that a collapse is coming they may want their equity now. Wonder if many are taking a lump sum distribution and using it to buy gold?
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Old 03-25-2012, 10:45 AM
 
Location: Prescott AZ
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But, the good thing with the reverse mortgage is that your house is paid off. You have no more mortgage payments, and you have some cash (maybe a little cash) to use for your needs. I have considered this myself. If the initial costs were not so high, it would be a great option. Yes, you do need to stay in the house until you die. But then alot of seniors plan to do so anyway. JMHO
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Old 03-25-2012, 12:46 PM
 
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many have have been told to put the house money from the reverse mortgage into high fee anuities too...
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Old 03-25-2012, 01:05 PM
 
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Quote:
Originally Posted by mathjak107 View Post
many have have been told to put the house money from the reverse mortgage into high fee anuities too...
The commercials are sorta connected and build on each other
Reverse Mortgage
Gold/Silver/Coins
Annuities

Will have to start noticing how much they build on each other.
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Old 03-25-2012, 01:08 PM
 
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Quote:
Originally Posted by mathjak107 View Post
many have have been told to put the house money from the reverse mortgage into high fee anuities too...
After writing a poster earlier today about the October 1987 crash, I started wondering how many early boomers were investing then and took that big hit. I knoe from our previous posts it helped condition each of us to market swings.
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Old 03-25-2012, 01:12 PM
 
Location: Los Angeles area
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The words "falling for" in the OP's thread title may be accurate, in many cases. Over the past couple of years, I have received at least two misleading advertisements in the U.S. Mail for reverse mortgages, the most recent one just a couple of weeks ago. Now I wish I had saved it to quote from here. It spoke of applying for our government benefit, and of our "federally guaranteed" benefit. If my understanding is correct, what is federally guaranteed is the banks' risk, not the consumers'. In other words, if a consumer outlives his expected longevity by a considerable margin, the issuing bank would stand to lose a bundle on the reverse unless it were specifically indemnified from that. Mathjak, do I have that right?

In any case, the ad was worded so as to make the ignorant think that there was some "benefit" waiting for them if they would just apply, and worse, that the benefit was coming from the government. There was nothing about heirs losing the equity in the house or the high fees involved. I am not arguing that reverse mortgages never make sense for anybody under any conditions, but those ads really made my blood boil. For one thing they were obviously aimed at the uninformed and for another they were obviously misleading.
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Old 03-25-2012, 03:51 PM
 
Location: Oxygen Ln. AZ
9,321 posts, read 16,596,237 times
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Quote:
Originally Posted by Escort Rider View Post
The words "falling for" in the OP's thread title may be accurate, in many cases. Over the past couple of years, I have received at least two misleading advertisements in the U.S. Mail for reverse mortgages, the most recent one just a couple of weeks ago. Now I wish I had saved it to quote from here. It spoke of applying for our government benefit, and of our "federally guaranteed" benefit. If my understanding is correct, what is federally guaranteed is the banks' risk, not the consumers'. In other words, if a consumer outlives his expected longevity by a considerable margin, the issuing bank would stand to lose a bundle on the reverse unless it were specifically indemnified from that. Mathjak, do I have that right?

In any case, the ad was worded so as to make the ignorant think that there was some "benefit" waiting for them if they would just apply, and worse, that the benefit was coming from the government. There was nothing about heirs losing the equity in the house or the high fees involved. I am not arguing that reverse mortgages never make sense for anybody under any conditions, but those ads really made my blood boil. For one thing they were obviously aimed at the uninformed and for another they were obviously misleading.
If you need the income, just move into a small studio and rent the house out, or stay with a family member if you are welcomed in.
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Old 03-25-2012, 05:19 PM
 
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there is nothing special about a reverse mortgage.. its a loan with a balloon payment due when you are out of the house in a nutshell.
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Old 03-26-2012, 06:25 AM
 
Location: Baltimore, MD
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Quote:
Originally Posted by mathjak107 View Post
there is nothing special about a reverse mortgage.. its a loan with a balloon payment due when you are out of the house in a nutshell.
Except the balloon payment/debt is non-recourse.
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Old 03-26-2012, 06:33 AM
 
Location: Beautiful Rhode Island
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quote: "its a loan with a balloon payment due when you are out of the house in a nutshell"

And try living in a nutshell!
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