Talk:Reverse mortgage/Archives/2012

a note

Most of this seems to be lifted straight from the "Reverse Mortgage Fact Sheet" linked in the External Links section

An entire section was taken directly from http://www.consumersunion.org/finance/revexewc899.htm so I deleted it. DCB4W 20:27, 30 December 2006 (UTC)

Confusing Sentence

Confusing sentence in the last line of the Criticism section. I think "no assets" was supposed to be "not assets". In general, I think the whole sentence would be clearer as "The sole remedy to the lender is the collateral (the house itself, but not the assets in the estate)."

Disclaimer: I'm no finance expert… I'm just interpolating from what's there. Cmjanicki (talk) 04:44, 28 April 2011 (UTC)

Inconsistency

Under the "Volume of loans" paragraph, it states: "Section 255 of the National Housing Act, which governs the HECM program, limits the aggregate number of outstanding HECMs to 250,000. The cap could possibly be reached in 2007 or 2008, and efforts are currently underway to remove or increase the limit."

Then under the "Demand for reverse mortgages on the rise" paragraph, it states: "The Federal government in December 2007 removed the restrictions on the number of outstanding reverse mortgage loans they would underwrite at any given time. Prior to the new legislation, the original limit was 275,000." Can someone please correct these conflicts with the correct information? Thanks, Apache0c—Preceding unsigned comment added by Mercantiledecor (talk • contribs) 20:15, 12 May 2009 (UTC)

Facts

I think that in some reverse mortgages, the home owner pays some money and in others he gets money back or pays nothing. previously, it said that he pays nothing. [1] can someone check this for accuracy? --ʀ6ʍɑʏ89 01:31, 13 February 2006 (UTC)

The HUD article says: You don't make payments, because the loan is not due as long as the house is your principal residence. That is consistent with the NYT article that I added as a citation (see below), and with the other external links which I checked. I have removed the text that says the borrowers pay, since it is flatly contradicted by several sources and not supported by any that I could find. If someone does find a source, I'd be happy to see it added back with the source cited.

I note that when I checked the Australian link, I found that the program seems VERY different from the U.S.. For example, it says If you can go on living in your home for a reasonably long period of time, you may be getting good value for money. However, if you die or have to go into aged care soon afterwards, you may have sold your home too cheaply compared with selling it on the market. That isn't true in the U.S.; when you get a reverse mortgage, you're NOT selling your house, you're borrowing against it. (In other words, the article would certainly benefit from a separate section on what "reverse mortgage" means in Australia.) John Broughton 04:52, 13 February 2006 (UTC)

Citations

i think we need some in-article citing. User:John Broughton, can you add some citations for the major changes you made? --ʀ6ʍɑʏ89 01:31, 13 February 2006 (UTC)

Actually, all the information I added is from one NYT article; I've added a link in the last section (external links) to that NYT article. Apologies for not doing this at the time of the rewrite.

(The unusual URL is from this site, based on a comment here about creating permanent links, since after a week or so the NYT moves the article, shows only a small portion, and wants to charge for the rest.) John Broughton 04:54, 13 February 2006 (UTC)

Germany

Experts study the American system. In the past, the German old age pensions were comparatively high. That is changing and with a growing group of aging poeple without children, the interest is also more and more given to install a comparable system. Until today, a "lebenslanges Wohnrecht" (lifelong right to resit) and "Leibrente" (special pension) are common.

Adding references

I am new to this so if I did have valid reference material how does it get approved for that section? —Preceding unsigned comment added by Rmlusa (talk • contribs) 02:37, 14 December 2007 (UTC)

Reference your content additions with established news sources or literature , this is always best practice.External links policy on Advertising and conflicts of interest states You should avoid linking to a website that you own, maintain or represent, and in this case, it appears your related to reversemortgageloansusa.net and bestreversemortgage.com. IE. (Rmlusa (talk · contribs)). You would want to avoid a conflict of interest buy citing those urls. Also those links would not be considered reliable sources(WP:RS). thanks--Hu12 (talk) 02:50, 14 December 2007 (UTC)

In the first section "lender" should be "lenders". — Preceding unsigned comment added by SFLibCon7 (talk • contribs) 19:27, 19 December 2010 (UTC)

Blog references

The links that are currently referenced for the "Reverse Mortgage Daily Blog" are incorrect. These links reference some blogger out in Arizona. These links (I don't know why there are 3 of them) should be going to http://reversemortgagedaily.com. The current link is clearly an error. —Preceding unsigned comment added by Gyedinak (talk • contribs) 12:04, 25 March 2008 (UTC)

I have replaced all these with {{citation needed}} tags; blogs are not considered reliable sources. --CliffC (talk) 04:05, 3 April 2008 (UTC)

POV

Intro paragraph sounds like it was written by the lenders, needs to be made more neutral.--69.216.173.237 (talk) 01:00, 28 February 2009 (UTC)

Actually, the whole article does. A lot of the reverse mortgage lenders are sharks who absolutely rape the oldsters on fees. Also they rely a lot on the confusion that inevitably occurs when an elderly person is presented with rapid-fire information. Do people think there should be a criticism section?Ndriley97 (talk) 04:56, 13 March 2009 (UTC)

Added a quick-and-dirty criticism section. It needs work (particularly on sourcing), but I'm going to say that this is a case of better late than never.Tyrenon (talk) 10:18, 18 January 2010 (UTC)

I agree Ndriley97. In fact, the entire "criticism" section is basically a copy and paste from some blogger that may be a front for a reverse-mortgage company, and at the least is written by someone that works as a reverse-mortgage lender. The blog is at least referenced (link removed) but generally speaking, a section titled "criticism" shouldn't be a section that's only purpose is to debunk them. I suggest removing the entire section unless it's re-written to serve as an actual criticism section, or additional sources are supplied. A quick search on Google revealed many. Cbreaker (talk) 04:32, 26 April 2010 (UTC)

I don't know anyone who really understands it well enough to critique it who isn't actively engaged in the business. In other words, like just about every other financial instrument, the only real experts are the people who market or have marketed the products. Good luck finding unbiased sources on a complex product like reverse mortgages. Everyone I know who does them only works with reverse mortgages due to licensing, regulations and market constraints. The entire financial system is set up this way, if you aren't appointed to a given company as an agent, good luck even finding the fine print to read without asking someone who is. Which means that any attempted deconstruction of this topic would probably either be non-authoritative or violate NPOV, from either a current or retired producer. And it would be out of date the next year.70.225.134.79 (talk) —Preceding undated comment added 00:10, 13 May 2010 (UTC).

"RAM"

I feel like the legal name of this is "Reverse Annuity Mortgage" and should be on the disambiguation page of "RAM" —Preceding unsigned comment added by 76.19.47.162 (talk) 18:01, 11 June 2009 (UTC)

Done Mcavic (talk) 04:24, 30 September 2010 (UTC)

AustinTexasRRTX (talk) 23:28, 4 December 2010 (UTC) AustinTexasRRTX AustinTexasRRTX (talk) 23:28, 4 December 2010 (UTC) Early in this subject it should be emphasized, as opposed to deep in the article, that the owner must pay his/her taxes and casualty insurance premiums. Also, I imagine the contract requires them to maintain the property. It should also point out that a reverse mortgage impacts upon estate plans. If the only significant asset in the estate is the residence, there is a high chance there will be no there, there, when they die. Essentially, reverse mortgages allow for the senior to enjoy his/her estate rather than leave it to the children. There is nothing wrong with seniors enjoying the fruits of their lives, but it should be made clear that they are likely passing little plus they must pay the taxes, insurance and upkeep.

Possible links

OK. Directions under "external links" are to propose new external links here. Here are two for consideration:

1. Current and Historic Reverse Mortgage Rates

2. HECM Loan Activity Data

3. Annuity for Life Calculator

You may be interested to know that the National Reverse Mortgage Lender (NRMLA) site website also provides similar information in static format (i.e not searchable or interactive). However, they restrict access to "members only" NRMLA which seems to run counter to Wikipedia's mission.

I do believe these links add value to anyone searching for information on reverse mortgages.—The preceding unsigned comment was added by Sagetips (talk • contribs) 17:35, 20 October 2006.

• sorry.. those are adsense blogs, both are Links normally to be avoided and are against policy. However feel free to contribute content rather than links. see Hu12 17:49, 20 October 2006 (UTC)

So, do I understand that sites with adsense cannot be linked to by Wikipedia? If so, OK. Or, if by "adsense blogs" you mean the blog was created solely for purpose of ad sense, then you did not take much care in reviewing site.

By the way, is the "discussion" board a "one-person" (HU12) decides scenario or what?—The preceding unsigned comment was added by Sagetips (talk • contribs) 18:00, 20 October 2006.

• they are both... adsense sites and also blogs. The discussion board is open to all editors, i just happend to answer first. anyway, Wikipedia views these as Links normally to be avoided and would be considered Spam if added. Hu12 18:35, 20 October 2006 (UTC)

OK Thanks.—The preceding unsigned comment was added by 207.74.51.248 (talk • contribs) 18:45, 20 October 2006 .

Adding those external links to reverse-mortgage-information.org seems like a total waste...we're just linking out to external FOR PROFIT websites, we might as well link out to monetized websites like http://www.aboutreversemortgages.com — Preceding unsigned comment added by 108.21.103.51 (talk) 06:50, 12 May 2012 (UTC)

Outdated AARP Survey

I think it's fair to say that any pre-crisis survey of satisfaction related to mortgages is nearly useless with regard to today, and think Criticism bullet point #2 should be removed (or better yet, updated). Topher0128 (not logged in) 206.196.103.158 (talk) 22:06, 8 March 2012 (UTC)

I would think that a picture is worth a thousand words. So in lieu of a picture could someone please provide a numerical example or even 2 or 3 that might give the reader a bit better sense of what this really means financially. For example assume someone like me has a house with 200,000 equity at current market. What options would a person have, how would it work, what would it cost etc. — Preceding unsigned comment added by Born in summit (talk • contribs) 00:32, 9 June 2012 (UTC)

Terminal condition

So what happens when the mortgator dies? Does the lender assume ownership of the property? 4.64.8.220 28 June 2005 17:32 (UTC)

yes, the lender takes it, sells it, and regains the loaned money. --ʀ6ʍɑʏ89 01:31, 13 February 2006 (UTC)

No. The loan becomes due when the remaining surviving borrower dies. Just like any mortgage (lien) on a property, it must be paid. The heirs can sell the property as they normally would or refinance it if they wish to keep the property, to pay-off the reverse mortgage loan balance. The lender never takes title (forcloses) on the property unless you break the loan agreement. As a non-recourse loan, the heirs cannot owe more than the value of the property.--Nrosskothen 19:18, 19 January 2007 (UTC)

Nrosskothen, it wuld be nice if you could incorporate that in the article, seems notable and informative. --Hu12 19:37, 19 January 2007 (UTC)

Sounds to me like a great way to screw your kids over with bills you didn't pay. Funny how the commercials never mention that little tidbit. I think the article should include something about the heirs' responsibility for the loan. I would do it, but I'm certainly not an expert on the subject. —Preceding unsigned comment added by 68.209.191.158 (talk) 19:57, 5 June 2008 (UTC)

A reverse mortgage is a non-recourse debt which means that if the debt (including years of compounded interest) is greater than the market value of the property when the owner dies or leaves the property, the lender cannot collect the deficiency. Instead, the feds pay the deficiency to the lender. Hence, the children or heirs of the former owner are not stuck with the debt. If the market value is greater than the cumulative debt, the heirs get the equity. Greensburger (talk) 23:13, 5 June 2008 (UTC)

Hmmm, as Nrosskothen says above, "The heirs can sell the property as they normally would or refinance it if they wish to keep the property, to pay-off the reverse mortgage loan balance." So, either they have to get rid of their house or, assuming they don't have enough money to pay it off, go into debt to keep it. So, yes, they may not actually go upside down in debt, but they can indeed go into debt. 71.13.147.17 (talk) 03:37, 24 May 2011 (UTC)

Or they could wash thier hands of the whole deal and not go into debt. The bottom line is there is you can't saddle your heirs with debt by taking on a reverse mortgage. They can only choose to go into debt if they want your house even though you had a reverse mortgage.--Ff11 (talk) 02:07, 27 June 2012 (UTC)

Unclear

I'm very unfamiliar with finances and honestly this page confuses me. I'm curious as to what one of these is and though I have a slightly better idea, I'm still not sure what sets this apart from other sorts of loans based on the value of your house.

66.240.35.207 06:34, 10 February 2007 (UTC)

Here is a good brief explanation:

Reverse mortgages allow homeowners aged 62 and over to convert home equity into cash while living at home for as long as they wish. Borrowers continue to own their homes, and do not need to make any monthly payments. Instead, they can choose to receive the funds as a lump sum, line of credit, or monthly payment. The loan comes due only when the last borrower moves out, dies, or sells the home.

Source: GNMA: Government National Mortgage Association, a wholly-owned corporation of the US Government that functions as part of the Department of Housing and Urban Development (HUD). Bobcheal 22:32, 16 March 2007 (UTC)

I'm not an expert by far, but I think of it like this: In a Reverse Mortgage, you are lending yourself money from the value of your home, with a large up-front fee going to the company administering the loan for you.

The compound interest also goes to that company, instead of you, so you end up with nothing when you have paid off the loan you gave to yourself, since the company took it all. But you can never go into real debt with it.

Actually, it's even simpler than that: A reverse mortgage is selling your house, brick by brick, undoing all your mortgage payments when you bought it, but the interest still goes to the company/bank.

If you've ever said:

Early in the normal mortgage: "I figure I own the front porch, and the bank owns the rest."

Near the end of a normal mortgage: "I own everything except the back porch."

Early in the Reverse Mortgage: "The company owns my front porch, but I own the rest."

Near the end of the Reverse Mortgage: "The company owns most of it, but I still have the back porch."

So a reverse mortgage is, errr, the reverse of the process for a normal mortgage. Except in BOTH mortgages, you are paying hefty interest to the company/bank. Nobody is paying you back the interest from your initial purchase.

If you pay in cash for a house initially, the "lump sum" reverse mortgage is somewhat to the reverse of that, except you are paying heavily for the cash you get in the "lump sum".

Whether the Reverse Mortgage suits your needs or not is up to you.

PS A possibly neutral source would be whomever manages the HUD-required counselors. They understand the risks / benefits, or they wouldn't be doing their job, but probably have a balanced view of the subject. — Preceding unsigned comment added by 67.128.187.35 (talk) 18:51, 25 July 2012 (UTC)