Posted by HisHughness on 7/20/12 2:21am
Msg #427491

A little explored aspect of the foreclosure crisis: Seniors.

http://www.nytimes.com/2012/07/19/us/foreclosure-rates-surge-for-older-americans-aarp-says.html?nl=todaysheadlines&emc=edit_th_20120719

Reply by JanetK_CA on 7/20/12 4:23am
Msg #427495

Interesting article & valuable cautionary tale for us all! n/m

Reply by MW/VA on 7/20/12 7:56am
Msg #427502

This is a sad truth. In many cases, there's no way older

people's income has kept up with inflation. I'm at least glad to know that Reverse Mortgages are an option for some.

Reply by Dave Bullock on 7/20/12 8:40am
Msg #427507

Re: This is a sad truth. In many cases, there's no way older

it has floored me,how many people 60-70 years old, are refinancing for 30 years. Three days ago, i closed a couple who were 80. I do not understand how and why, the lenders are doing it. Most often, the brw is motivated by a saving of a hundred or two on the payment, and a missed payment. It is very sad

Reply by Doris_CO on 7/20/12 12:47pm
Msg #427522

Re: This is a sad truth. In many cases, there's no way older

Reverse Mortgages are not much of an option for the older homeowner because of the loss of value of the home.

Reply by jba/fl on 7/20/12 1:40pm
Msg #427526

Re: This is a sad truth. In many cases, there's no way older

The more I hear of this program (RM), the less I like it. There are many down sides to them.

Reply by Linda_H/FL on 7/21/12 11:02am
Msg #427550

Yes, there are downsides...but I did one last night

home is held FREE AND CLEAR - no mortgage - but as she told me, "life made her do it".

I've seen the flip side too - husband and wife - husband over 62 takes RM - dies - wife under 62 doesn't qualify for RM nor does she financially qualify to refi - going to lose the home she's been in for decades.

Golden years my patootey.

Reply by MW/VA on 7/21/12 12:58pm
Msg #427578

"wife under 62 doesn't qualify for RM nor does she

financially qualify to refi". RM or not, she would need to get a loan even if it was a traditional mtg. in both names. A lot of people don't understand that "With rights of survivorship" doesn't mean you can "inherit" a loan.
That's why financial planning is so important--provisions for life insurance or something to protect the surviving spouse. To make matters worse, a lot of people have lost money in investments, and are very vulnerable in this economy.
IMO "golden years" means you'd better have a lot of gold stacked up.

Reply by HisHughness on 7/21/12 12:14pm
Msg #427566

Reverse mortgages are a wonder instrument to have available

... under appropriate circumstances. There simply is no other financing approach in which a borrower can use the equity in his home to improve his current circumstances, never make another house payment, and do it without a credit check or even an income qualification requirement.

There are circumstances under which a reverse mortgage is not the best approach. There are instances in which subsequent events render them, in retrospect, an unwise decision. But the same is true, and perhaps even more so, for any other mortgage; that does not obviate the advantage of having reverse mortgages as one of the financing alternatives available for the homeowner.

For some drivers, a Dodge Ram pickup is the best choice. For others it's a Toyota Prius. That neither the Ram nor the Prius is a universal fit does not render either unacceptable or unworthy of consideration.

Reply by JanetK_CA on 7/21/12 10:59pm
Msg #427618

Re: Reverse mortgages are a wonder instrument to have available

Well said, Hugh. I did an RM yesterday for a 75 yo unmarried woman (still sharp as a tack), who was paying off two loans and will have substantial $$ left over. She said that this is the only way she will be able to give up her full time job and not have to continue to work. Seemed like a pretty smart move for her. Fortunately, she still had quite a bit of equity left in her home since she's lived there for a very long time - and never used it as an ATM.

[And no, Hugh, I'm not going to give you her phone number... ]