The concept of reverse mortgages has received some unfavorable press and negatively biased coverage of news recently. In this conjecture with it, the AARP (American Association of Retired Persons) has just published a webcast entitled “Reverse Mortgages: Rescue or trap?” Encourage viewers to have a balanced, informative and just this type of loan.
Most newspaper articles or video segments covering reverse mortgages tend to spend only a couple of minutes or a couple of columns. The AARP has dedicated a total of 26 minutes covering the key questions of consumer protection and prevent abuses in its application to the field of reverse mortgage loans.
The report is the interview style and includes images of a diverse group of people, including two elected officials (Republican and Democrat), an initiate of the reverse mortgage industry, a member of the media and a consumer advocate.
An AARP survey showed that 93% of older people who chose to take a reverse mortgage is glad he took one. But it remains necessary to ensure that those taking this loan are protected from abuse.
Barney Frank, chairman of the House Financial Services was a member of the committee that the improved protection of people who take reverse mortgages as part of the Housing and Economic Recovery Act of 2008. Peter Bell, president of the NRMLA (National Reverse Mortgage Lenders Association) stated that the abuses of reverse mortgage system is often the case with newcomers to the business that used deceptive sales tactics to convince older people to take on other reverse mortgages financing options available.
No industry is immune to a few bad apples in the form of unethical sales staff or misled. We have seen these elements in all professions that exist today, so it is no different in the case of the reverse mortgage industry as well. What is observed by a consumer advocate Center for Responsible Lending, the loan itself is usually not the problem – (abuse by unscrupulous people is).
Abuse of seniors taking the reverse mortgage can take many forms, one of which is convincing them to invest their earnings over a reverse mortgage into an annuity or other inappropriate financial products. Unscrupulous sellers take advantage of seniors who are desperate for help and are in need of financial assistance.
Mary Beth Franklin, Senior Editor of Kiplinger Financial, noted that due to the recent decline in stock trading, some older people have been using reverse mortgages as a bridge … “Five to ten years ..” until the investment rebound and begin to recover.