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Old 06-12-2019, 01:14 PM
 
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Wall of text hits you for 19,000,572 damage and knocks you all the way to the "Alabama" subforum.
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Old 06-12-2019, 01:20 PM
 
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Quote:
Originally Posted by katharsis View Post
Also, FWIW, I think I read somewhere that problems occur when seniors do not take care of the property (due to age or other reasons), and then the lender has the right to take it back, and then the senior is left with little money and possibly no place to go.

(I could be mistaken about that, though.)
You are correct; that is how it works.

I did not read the entire article, but the first gentleman depicted failed to pay his homeowner's insurance premium. Yeah, that's a problem when you have a mortgage, reverse or otherwise.

I wonder if people don't become more forgetful about this sort of thing as they age. I try to make sure my mom (age 86) is keeping up on paying her bills, etc. There is a fine line, though, when you are essentially poking your nose into someone else's business.
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Old 06-12-2019, 01:25 PM
 
998 posts, read 748,429 times
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Quote:
Originally Posted by katharsis View Post
and then the senior is left with little money and possibly no place to go.

In most of these cases, the senior wasn't going to be able to keep the house anyways. The reverse mortgage simply delays the inevitable by allowing them to convert equity into cash (admittedly usually under very unfavorable terms) and delay adjusting living standards to what their income supports.

Rather than a reverse mortgage, a good financial advisor would be telling the senior to sell the house while there is still equity and then adjust living expenses to what savings and SS can support.

At the end of the day, the root cause of them loosing the house isn't the reverse mortgage - its lack of income and savings.
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Old 06-12-2019, 01:42 PM
 
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Read my (really, my mother's) personal story, here:

Reverse Mortgage ADVANCED INFORMATION THREAD Financial Freedom / Celink
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Old 06-12-2019, 01:43 PM
 
5,097 posts, read 2,483,020 times
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Quote:
Originally Posted by Pfalz View Post
In most of these cases, the senior wasn't going to be able to keep the house anyways. The reverse mortgage simply delays the inevitable by allowing them to convert equity into cash (admittedly usually under very unfavorable terms) and delay adjusting living standards to what their income supports.

Rather than a reverse mortgage, a good financial advisor would be telling the senior to sell the house while there is still equity and then adjust living expenses to what savings and SS can support.

At the end of the day, the root cause of them loosing the house isn't the reverse mortgage - its lack of income and savings.
Reverse mortgage is apparently associated with the Reagan administration and the goal to support aging in place. Rather than sell their home and move into a rental, they remain in the home for life and then the mortgage company takes the house. Those who default due to non-payment of home insurance or home taxes lose their homes except if they have failing health. In that case they can simply remain in the home regardless of defaults. Areas with higher rates of default may be where more people figured out how to work the system.
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Old 06-12-2019, 01:49 PM
 
3,247 posts, read 844,077 times
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Quote:
Originally Posted by Pfalz View Post
In most of these cases, the senior wasn't going to be able to keep the house anyways. The reverse mortgage simply delays the inevitable by allowing them to convert equity into cash (admittedly usually under very unfavorable terms) and delay adjusting living standards to what their income supports.

Rather than a reverse mortgage, a good financial advisor would be telling the senior to sell the house while there is still equity and then adjust living expenses to what savings and SS can support.

At the end of the day, the root cause of them loosing the house isn't the reverse mortgage - its lack of income and savings.
Sell the house... AND LIVE IN WHAT, on $800 a month?

What good is a financial adviser if the senior is at a stage in life that they cannot course-correct and continue to work and save, or live off of their retirement check? That time is long gone for these people taking out reverse mortgages. It's the only option, in a funds-scarcity situation, that allows them to stay in their home and stop making a house payment.

Maybe they did have a savings, but put it in the wrong financial vehicle, and was subject to spend-down when they had that medical emergency. A 401(k) would be safe in a scenario when a senior was bankrupted. Not so much a cash savings.

Tons of people I know who TRULY BELIEVED they were taking sound advice by having a checking and savings account, and working until they qualified for SS. Like they were "home free" if they ticked all the above boxes. Some things you don't know that you don't know.

Easy for someone to wind up in a very real situation where a reverse mortgage would be attractive.
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Old 06-12-2019, 02:05 PM
 
8,184 posts, read 11,902,987 times
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Quote:
Originally Posted by katharsis View Post
I appreciate the post, but next time, PLEASE post a link with just a summary of what was said in your own words (or else just post the first paragraph with the link).
That's the legal way to do it. What the OP did in C&Ping the entire article here is a violation of U.S. copyright law. What I find humorous, however, is that instead of deleting most of the text, City-Data is actually advertising this thread throughout the entire site in the little box to the right entitled Active threads from around the forum. They keep that up and this copyright violation could end up getting them sued.
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Old 06-12-2019, 02:17 PM
 
449 posts, read 106,202 times
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Quote:
Originally Posted by ddm2k View Post
Sell the house... AND LIVE IN WHAT, on $800 a month?

What good is a financial adviser if the senior is at a stage in life that they cannot course-correct and continue to work and save, or live off of their retirement check? That time is long gone for these people taking out reverse mortgages. It's the only option, in a funds-scarcity situation, that allows them to stay in their home and stop making a house payment.

Maybe they did have a savings, but put it in the wrong financial vehicle, and was subject to spend-down when they had that medical emergency. A 401(k) would be safe in a scenario when a senior was bankrupted. Not so much a cash savings.

Tons of people I know who TRULY BELIEVED they were taking sound advice by having a checking and savings account, and working until they qualified for SS. Like they were "home free" if they ticked all the above boxes. Some things you don't know that you don't know.

Easy for someone to wind up in a very real situation where a reverse mortgage would be attractive.
Go to low income housing, that's what.
If they can't afford the costs, that reverse mortgage is just delaying the inevitable as a previous poster pointed out. Once foreclosed they have no money at all.
Selling when you cannot afford to keep it up anymore at least gives you money in your pocket.
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Old 06-12-2019, 02:49 PM
 
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They are waiting for people to make a mistake so they can foreclose. If I was in that situation I would sell and use the money to rent.
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Old 06-12-2019, 02:55 PM
 
1,627 posts, read 559,576 times
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I actually learned something new from the long texts and the included links: That a reverse mortgage servicer can commence foreclosure proceedings merely by virtue of the senior/borrower failing to respond to correspondence!

In other words the borrower can be completely current in paying property taxes and/or homeowners insurance but if they accidentally don't respond to a mailing (which could just as easily have gone astray whilst in the USPS system, as not ... I fairly regularly get mail in my street box that belongs to my neighbor, or a piece of mail sorted into my PO box that was supposed to go into an adjacent or one-digit-off box number) sent by the servicer.

Now that is scary.

My ex-FIL was legally blind and had a caretaker come in daily, plus one of his sons would stop by twice a month to pick up his (FIL's) mail and take care of whatever needed to be paid, etc. I'm sure there are plenty of seniors in similar situations, which means it'd be easy for the other person to accidentally not respond to a letter from the RM servicer either.

I can kind of see the logic (no response might mean the borrower has died) but as someone who used to work for a foreclosure attorney, it seems waaaay too easy for these reverse mortgages to end up in foreclosure.

Also 120 days is not nearly enough time for an heir to figure out what they can do with the house after the borrower dies. It should be 6 months, minimum.
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