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Consumer Reports Article Cautions Readers
The magazine and self-described consumer educator and advocacy group Consumer Reports recently published an article entitled “Don’t Be Suckered Into Buying a Reverse Mortgage”.
In it’s paternalistic zeal Consumer Reports does dispense some practical advice but unfortunately makes use of pejorative terms such as vulnerable, at risk, ambiguous, and suckered. Today we will take a short editorial and factual review to prepare you to work with potential borrowers who may have read this piece.
Consumer Reports begins with the claim that the loans are often advertised as a risk-free way to fill the financial gaps in retirement. Not surprising since several media outlets have jumped on the CFPB’s recent report of reverse mortgage complaints, many which are related to advertising.
The article states that…
Download a transcript of this episode here.
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7 Comments
Consumer Reports does provide some valuable information in their work, but they also seem to have a “step over dollars to pick up nickels” mentality. I think the real interesting thing is that they market an annuity specifically to fund their operations. I think I have heard a few negative things about annuities over the years and yet they have no problem employing the product to serve their own needs. Perhaps some day they will tout the Reverse Mortgage as a funding mechanism for donations to support their work…..
Des,
Please be specific about their condemnation of annuities.
Unless you are talking about HECM proceeds being used to buy an annuity or older seniors buying a deferred annuity, I do not remember a general condemnation of annuities by Consumer Reports.
Have a great week.
In listening to Shannon it was surprising to hear a term like: “THE reverse mortgage program,” since there is none. Like Shannon we are all very, very prone to use the words “reverse mortgage” and the acronym HECM as if they are freely interchangeable when they are not. Unless we are discussing proprietary reverse mortgages or the proper name of the industry, why do we even use the words “reverse mortgage?” Why?
The reason why that term is not dying off is because of us and our marketing. The Fonz says it, Senator Thompson says it, and worst of all we say it. If we want the term “reverse mortgage” to die why do we ever use it when it is not necessary or even the best words to use?
Here is a self test. In a normal work day count the number of times you use the term “reverse mortgage.” Then in the evening decide how many of those times the acronym HECM would have fit just as well if not better.
If you are presenting HECMs, it is all right to say once in your marketing materials that you are presenting the only government insured reverse mortgage called a HECM but after that why, oh, why voluntarily refer to a HECM as a “reverse mortgage” (unless you believe that term enhances the presentation)? But if you keep freely interchanging reverse mortgage with HECM, stop complaining about its negative connotations.
As to Consumer Reports ever letting up on its pejorative descriptions of reverse mortgages, you will have better luck waiting for a black mamba to voluntarily back down once you are the target of its next strike.
I’M with the Texans ,, get rid of the CFPB As usual poor research on the part of the reporter ,, he/she also gets the recognition
a poor way to get it ,,,,,
Only if….
Every publication seeks to inform their readers of areas of importance. Consumer Reports is a good source of information about consumer products but they do not have the expertise to advise someone on their finances. Every opinion is worth what you pay for it or not. Regarding the CFPB..we have given legal power to a group of un-elected agents to police companies in the name of consumer protection. This power can be misused and without any regulatory body in place to hold the CFPB accountable, is a definite problem. I would support a bill that would regulate or perhaps abolish the CFPB. We have NRMLA to provide leadership to legitimate companies who serve the senior community in the reverse mortgage industry. It is also a note of particular importance that the majority of mortgage complaints reported by the CFPB were other than reverse mortgages. It is easy to use a small percentage of the reported complaints to create doubt and confusion. It is our responsibility to give our clients the facts.
Richard,
What???
Your only statements about the CFPB and reverse mortgages are the following: “It is also a note of particular importance that the majority of mortgage complaints reported by the CFPB were other than reverse mortgages. It is easy to use a small percentage of the reported complaints to create doubt and confusion. It is our responsibility to give our clients the facts.”
The fact is the Consumer Reports article never once referred to the mortgage complaints you cite. Instead it reported on the study done by the CFPB which is summarized by Reverse Mortgage Daily at
http://reversemortgagedaily.com/2015/06/04/cfpb-study-reverse-mortgage-ads-give-false-impressions/
Also please read the actual Consumer Reports article at
http://www.consumerreports.org/cro/news/2015/07/don-t-be-suckered-into-buying-a-reverse-mortgage/index.htm
Do you realize how bad it makes our industry look when our originations go around claiming to give clients facts when they do even know what the facts are? All Shannon can do in three minutes is summarize news. It is up to you to read about it so that you really know what is going on.
You might be able to claim you were pointing to what a little problem reverse mortgages actually are except your statements are in the same paragraph where you start off by writing: “Consumer Reports is a good source of information about consumer products…” If your intention was to show something outside of the Consumer Reports article, you never once stated that.