Cringe-worthy news

Like many of you, I receive Google alerts for any news stories related to reverse mortgages. Typical headlines read ‘Elderly Man Evicted After Taking Reverse Mortgage’. More often than not the reason for the foreclosure is buried six paragraphs into the article—the homeowner’s failure to pay property taxes. Oftentimes there’s no mention of what triggered the foreclosure- just the insinuation that reverse mortgages are dangerous.

Much like the gods condemned Sisyphus to push a boulder uphill for eternity repeatedly, reverse mortgage professionals find themselves engaged in an endless battle to counter inaccurate or misleading media narratives. 

“The truth is not a matter of opinion – it’s what the evidence shows”, said Carl Bernstein who with Bob Woodward cracked open the Watergate scandal. Sadly, when it comes to reporting on reverse mortgages the truth is often opaque due to a lack of factual evidence. 

That said, there are two reverse mortgage stories you’ll likely never read or hear.

First. Any homeowner with or without a mortgage risks foreclosure if they default on their property taxes. The same applies to any homeowner with a traditional mortgage loan. How this basic fact is repeatedly ignored by journalists is appalling. After all, most journalists are taught that the story is in the details. Perhaps a little more research would be helpful. 

Then there’s another story you’ll likely never read– How many homeowners were able to avert a foreclosure or stop the sale of their home in a public auction with a reverse mortgage.

How to overcome misinformation

Many of you can easily recall borrowers you snatched from the jaws of foreclosure. Perhaps it was an adjustable rate mortgage payment, a HELOC that switched to fully amortized payments, or thousands of dollars in back property taxes that put your borrower on the cusp of losing their home.

I’ll never forget one elderly Greek gentleman I helped in 2009. During the Wild West days of the great housing boom, Countrywide Mortgage’s pick-a-pay loans were the rage and unfortunately sold to unsuspecting seniors on a fixed income. His interest-only payments were set to nearly double in a matter of months. The specter of foreclosure loomed ahead. Thankfully, he was able to draw $15,000 from his IRA account to close his HECM loan and we were able to provide housing security for years to come.

Sometimes you have to lead a horse to water 

So we have two choices. We can lament the lack of accurate media coverage about reverse mortgages or engage with the media. 

The best place to start is your local business editor. Offer to be a resource for their reader’s questions about reverse mortgages. Even better, share a story of how a reverse mortgage helped save a homeowner from foreclosure. In one case, my HECM borrower shared his experience in getting a reverse mortgage with a reporter which was featured on the front page of our local newspaper. 

Too often reporters draw from tainted well of fellow journalists stories about reverse mortgages unaware of the inaccuracies being copied and pasted. Perhaps it’s time for the real experts to step up and set the record straight.