Don’t Be Deceived- Let Not Your Heart Be Troubled



Do not be deceived. Let not your heart be troubled

Do not be deceived. Not so much by disinformation by incomplete information. Last month’s (April) endorsement data is one example. Another is media financial pundits who have long dismissed the concept of one’s home being a retirement asset…

 

1 comment

James E. Veale, CPA, MBT May 11, 2020 at 6:04 am

I read an article today that was odd. To paraphrase one section the article in Realtor.com, it seems an industry leader was describing what drives seniors to get reverse mortgages. He started by saying that reverse mortgages are “a needs based transaction.” He then went on to say that seniors get one

1) when they need to augment their financial stability,
2) when they need to augment their retirement funding, and
3) when they need to get rid of the burden of monthly mortgage payments.

Finally, the leader adds that he expects reverse mortgages to become part of financial planning.

The last point in the paraphrase above, about the need to get rid of mortgage payments sounds like the case is being made to perceive reverse mortgages as loans of last resort. Again believing the industry leader wanted reverse mortgages to be seen as a retirement planning product, he should have removed his first comment about a needs-based transaction. All of the other places where he used the word “need,” he should have replaced it with “wisely choose.” So that rather than needing to augment financial stability and retirement funding, seniors wisely wisely choose to augment them. The same is true with ending monthly mortgage payments, seniors should be seen as wisely (or prudently) choosing (or wanting) to avoid draining their cash flow or their cash reserves through monthly mortgage payments get reverse mortgages.

What was strange about the article? it appears in Realtor.com and yet Tiffani, the writer of the Realtor.com article, never once mentions H4P or proprietary reverse mortgages that allow seniors to purchase the collateral for the mortgage with proceeds from the loan. Wouldn’t this publication be the place to tout reverse mortgages with a purchase option? I do not think anyone in the industry is responsible for that omission.

On the other hand, there is NO mention of H4P or other reverse mortgage purchase options which is an oversight by the Realtor market. But this is to the shame of those in the industry that have spent marketing dollars and so much time to try and grow that market. segment to little avail. Anecdotally,, it is said that the purpose of bringing the H4P conversation to Realtors is not so much to get them to use the product but to get a foot in the door so that they can hear about traditional HECMs which apparently sell better with Realtors.than H4Ps or other purchase option reverse mortgages. It seems odd to be telling Realtors the outlook for financial planning and reverse mortgages when the audience is Realtors.

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