May 20, 2008

Mortgage brokers really care about old people. I bet they do reverse mortgages for free out of the goodness of their hearts

"Daddy, what do you do for a living?"

"Sorry son, I can't tell you, it's too shameful"

(note - I have no idea if the company in the video is good or bad. I do know that their pitchman is pretty slick - I'd check my watch after shaking that hand)

26 comments:

Chris said...

I wonder how many old people realize they are screwing their kids out of inheriting the house when they die when they sign this paper.

Anonymous said...

What does it matter? We're all headed for the FEMA death camps. Don't believe me? Then tell me what this video is all about:

FEMA Camp Video

Vanilla Ice said...

A reverse mortgage, never before have seniors been able to screw themselves so badly before.

Anonymous said...

Chris, if the retirees got to spend their equity, how is that screwing anybody? Simplistic...

Anonymous said...

Everyone should be concerned about the following:

Rex 84, Continuity of Government, Suspension of the Constitution and Martial Law in the USA

Dubya now has the ability to declare martial law with the swipe of a pen and the infrastructure is already in place to impose it. Are you sure you still live in a free country?

kingcalvin said...

This is INDYMAC Bank

that makes it even more ridiculous!

Chris said...

Anonymous...

Say the house is worth 370K.

Lets say the Senior uses up 100K worth of equity in the reverse mortgage and then dies.

You would think the seniors adult children would get 270K and the bank 100K right?

WRONG!

If the adult children can't come up with 100K Cash to pay off that mortgage. The bank gets to foreclose on the house and makes a profit of 270K, In addition to getting their 100k of loaned money back.

The adult children get nothing and screwed out of the house.

It is a huge scam to screw people of their inheritance because most old people don't realize the ramifications and would not participate if they knew what they were doing. Its a money making travesty for mortgage brokers and banks.

Anonymous said...


Dubya now has the ability to declare martial law with the swipe of a pen and the infrastructure is already in place to impose it. Are you sure you still live in a free country?


Presidents have always had that authority. Goerge Washington, FDR, and Abraham Lincoln have used it. Even governors have declared martial law during riots and natural disasters.

Anonymous said...

Well, In San Diego County, the pitchman is Robert Wagner. You ask what his gig was that made him famous? "It takes a Thief". He also pitches used german cars.

Weird.

Shirt

Anonymous said...

Well, In San Diego County, the pitchman is Robert Wagner. You ask what his gig was that made him famous? "It takes a Thief". He also pitches used german cars.

Weird.

Shirt

Anonymous said...

I talked to a senior that told me the mortgage agent wanted over 20 thousand to make a reverse mortgage . Apparently if the house goes down in value ,than they can stop payments to the senior .

I am more concerned if this type of loan is viable regarding the secondary market investors and what are the risks.As much as we don't like to discuss the investors that put up the money for these loans or the people that insured these loans ,I believe all loans have to have the risks weighed in a proper manner .I'm also concerned about a senior paying so much in loan fees for a loan ,yet the loan can be cut off if the property goes down in value . Somehow that sort of set up doesn't seem fair either .

We are at the point now that the only entity that is willing to take the risk of real estate loans is the government ,which means the taxpayers . The secondary loan investment market was destroyed by this fraudulent housing boom and
nobody likes to talk about who is really being bailed out.

I have never seen such BS peddled by the media ,the government ,and the real estate industry, regarding this extreme contraction in real estate prices .

As far as old people screwing their children by signing the loan papers ,it goes without saying that you need to depend on yourself for retirement .A senior can be broken by medical costs also and end up using up all their assets by the time they die.

Most seniors I talk to want to be able to leave as much as they can to their heirs ,but when push comes to shove if they need to eat they will eat . I know a lot of seniors that spend all the extra money they have on their grandkids or children trying to help them out.

After I reached a certain age in life I stopped thinking in terms of what my parents could give me ,and started being more concerned about what I could do for myself.

With inflation ,seniors are going to be hard pressed on fixed incomes to not lose buying power every year .

When you younger people reach a older age ,you will not want the younger people wanting to get rid of you . I know a 82 year old women that spends all her extra time driving people that don't have transportation to the doctors . I know a couple of seniors that give a bunch of free time to helping out the police departments with code enforcement . I know countless seniors that help with baby sitting and all kinds of help for their children . I know one senior couple that takes their grandchildren to school everyday and than picks them up again at 4 o'clock and can never go anywhere because of that obligation .

I know seniors that would love to have jobs ,but they have been put out to pasture and no one will hire them .

Our society and government set it up that they would put people out of the work force at 65 . Now that the whole ball of wax is changing and those ideas were not so sound, you can't resent seniors that went along with the program and gaged all their planning based on that

The government has already started to tax social security ,they are extending the age to retire and I'm sure more will be done ,but don't blame the seniors for believing the program. The older you are the less time you have for re-planning retirement, and after you retire its almost set in concrete that they wont even consider you for jobs ,( some jobs are a exceptions like Judges and lawyers and Doctors and people who own their own companies ).

My point is that I wish that people would stop being so hostile against older people .It's classic that nothing every gets solves because everybody is always fighting over who deserves what .

Anonymous said...

In response to CHRIS ,

Can't the heirs of the senior just sell the house to pay the reverse mortgage off and pocket the rest of the equity ?

Are you saying that the terms of a reverse mortgage prevents the heirs from selling the house to cure any loan amount owed ? If this is true what you are saying ,than I agree that a reverse mortgage would be a rip-off loan .

I would think that most seniors would not go along with a loan like that if they knew the true terms . A senior would be better off just taking out a regular loan .

I have heard about old age homes that have a program that the senior puts up a bunch of money up front and if they die early the developer gets to keep the money .Now why would I want to live in a place where the owners profits if I die earlier ? SCARY

All I can say is that in this day and age ,(1)read all the fine print of any contract,(2)never trust sales people ,(3)and get your financial house in order so you are never desperate and fall victim to a scam or bad deal .

It's true that seniors are being hounded right now by the commissioned sales people to get a reverse mortgage .

Anonymous said...

Chris .

If it is true that the senior and the heirs can be screwed out of the remaining equity in the home by the senior taking out a reverse mortgage ,than why is the government allowing this sort of scam ? I don't get it .

Chris said...

Because the heirs have the ability to get the house back by paying off the balance, making it legal.

In reality though, how many people do you know have the financial ability to pay off a mortgage all at once right after a family member dies, and especially in these economic times.

I don't even think they are allowed to put the house up for sale until the bank is paid.

happy homeowner in the stix said...

chris, feeling entitled much, are we?

Look....what belongs to your parents is theirs. They are not caretakers of your property. If they want to spend every blessed dime on their way out, they are entitled to do so, and more power to them.

Maybe if you got off your happy ass and made some money of your own you wouldn't be so obsessed with your future inheritance. And just maybe you could see your parents as more than a financial resource. Just a thought.

Andrea Gressinger said...

The thing that is a bit shady about a reverse mortgage is it's expensive - that's it.

Chris it TOTALLY wrong. Of course you can sell the house to pay off the loan. In fact, the borrower is protected in the sense that you can never owe more than the loan. Best case is you get a the biggest loan possible, and then your house plummets in value. In this case the bank is stuck with the difference, not your estate or heirs.

In MANY cases someone's residence is their only asset, and if it's paid off, why not use the equity? I mean if comes down to enjoying the last few years of your life, or just getting by to help out my heirs; I'd rather the former.

Basically, a reverse mortgage is a way of selling your home, but still being able to live in it. And, as I mentioned it is expensive, but it is MUCH cheaper than the transaction costs to sell.

Anonymous said...

I am so doing a reverse mortgage when I retire.

Don't tell the kids, live of what they think is their inheritance. If I only there was a way I could see their faces when the estate gets divided...

Anonymous said...

I wonder how many old people realize they are screwing their kids out of inheriting the house when they die when they sign this paper.

-------------------------

you know, i think it is very greedy for offspring to expect an inheritance. If my parent's want to get a reverse mortgage I would tell them go ahead but would they consider letting me make the reverse mortgage to them. if I can't afford to then I will STFU. I want my parents to enjoy retirement to the fullest and ideally end up with ZERO networth in the end.

Anonymous said...

Dubya now has the ability to declare martial law with the swipe of a pen and the infrastructure is already in place to impose it. Are you sure you still live in a free country?

---------------------------------

The government being able to impose marshal law is not something new. Unfortunately it is necessary in case of extreme emergency. such an emergency has yet to happen but it could.

Anonymous said...

No I just went through with this with my parents died. You either pay it back or sell the house and it is payed out of that then the kids get what is less. Yes it stops the kids from getting the house in most cases and with the interest that has to be paid it does eat up alot of money but I was never counting or wanting to get rich off my parrents work and I am happy they got to use the money.

Anonymous said...

It would be nice if people could pass on paid for houses off to the heirs when they die ,but the system is designed to take every penny you have in the end .Inflation is killing older people and in spite of retirement planning, many seniors are using up every penny by the time they die .The medical business or nursing homes makes sure they get a big chunk of the assets.

But, we live in a society that values life and the medical advancements have been fantastic .I don't know if we as a society can afford to have people living to 120 years old or not. It makes a big different if you have to plan retirement to the age of 120.


When people lived on farms the older people were taken care of by the family .A forced social security system was suppose to take care of the retired ,but inflation and age spans increasing has messed up the viability of that concept .

All I can say to the younger people is to plan on living longer and make sure you save for retirement. Hope that you live in a society that will even give you a job after a certain age.

Reality Bites said...

"Chris .

If it is true that the senior and the heirs can be screwed out of the remaining equity in the home by the senior taking out a reverse mortgage ,than why is the government allowing this sort of scam ? I don't get it ."

It is legal for the same reason that the gubernment allowed FHA loans to get in to such a state of direpair that people were forced to go to Sub Slime lenders to get a loan - the gubernment is not for you, it is for bug business. The sooner EVERYONE realizes that cold fact the better off we will be. Either vote all the bums out, or realize the current system is by and for big business because they have the deep pockets. Period - and our society is so dumbed down (American Idol and reality TV) that they don't even realize it.

Anonymous said...

The way I see it, a reverse mortgage is paid back by the heirs by selling the house, since hardly anyone has the substantial chunk of change lying around to pay back out of their own pocket.

Because of this, reverse mortgage home sales are at the mercy of whatever market conditions happen to be when the owner kicks it. (Can't just hold off selling until a few years down the road when prices are better, because a bank is breathing down your neck for the loan repayment RIGHT NOW)

Another problem I see is in the event that the home sale fails to bring in enough to pay off the reverse mortgage loan, it is unclear to me how far the banks can push the heirs to finish paying off the loan. It may be that the heirs are legally on the hook for any remaining debt.

It would be nice if someone could clear this up with some facts.

Arizona Jake said...

If you think reverse mortgages are screwing seniors, just wait until all those boomers who bought, and are buying, long term care policies try to collect on them 15-20 years from now.

Just like all the disability policies that were sold in the 1980's when boomers were young and healthy. The insurance company (NOT YOU) decides if you're disabled and in the case of long term care, they (NOT YOU) make the decision if you need to go into a care home. It doesn't matter what your doctor says, because they have their own doctors who for a fee will gladly say you're not disabled, or you're not sick enough to go into a care home.

Anonymous said...

Yep, that is the next proposed step. Hi Keith, Smug Bastard here. Read that Ginnie Mae report to Congress yet? Selling Mortgage Backed Securites that are collateralized by reverse mortgages is part of the business plan - backed by the full faith and credit the United States. Boomers who are getting near retirement and who got fleeced in the stock market or did not save enough could be a big burden on the Social Security system so why not let them bleed out "value" from their houses - you can't have them all put the shack up for sale at once - that would make for a "bubble" in for sale real estate and drive down prices further. What a plan.

Anonymous said...

a real danger that would concern me would be if the mortgagee were to "out live" the cash withdrawl capacity of the house in a declining market. in other words, if the house is re-appraised at five year increments (bad news in a declining market) and a certain ltv must be maintained and the mortgagee were to keep living way past expectantcy, they could be looking at a situation where the largest physical asset (comfortable shelter) they had may become totally depleted of present cash value and the mortgagee finds themselves at the mercy of a landlord 20 years into the future with a fixed (and maybe questionable) income and declining health - and all because they wanted to live it up "on the house" when they were in your sixties or early seventies - I would not trust it. I'd rather keep an unemcumbered comfortable place to live and just live within my means.