GAO warns on Reverse Mortgages
The HECM reverse mortgagehas historically provided an advantageous opportunity to senior homeowners who struggle to manage their bills post-retirement. At its best, HECMs allow homeowners to convert equity in their homes to a tax-free income, without increased mortgage payments, and without the risk or reality of having to sell their home or sign over the title.
GAO financial products like annuities are being sold in conjunction with reverse mortgages, which may not be suitable in some situations. Though the Housing and Economic Recovery Act of 2008 was established in part to restrict this cross-selling, it is still working on developing these regulations.
Since HECMs require high insurance and startup costs, they are a prime target of mortgage fraud scammers. GAO discovered that in some instances, HUD, the federal agency responsible for protecting consumers from being deliberately misled by lenders, dropped the ball when it came to adequately informing seniors of the dangers of reverse mortgages.
One of the most promising protective measures was the recently tightened counseling required prior to borrowing, but the program’s shortcomings became evident when GAO employees went undercover to receive such counseling. Though the counselors generally conveyed accurate and useful information, none of the counselors covered all of the topics required by HUD. In almost half the sessions the counselors did not discuss required information about alternatives to reverse mortgages, such as disclosing that some of these loans carry large insurance and origination costs, and that their loan may affect their eligibility for government benefits like Medicaid. Also, the reverse mortgage depreciates the value of parents’ inheritance for their children.
Their conclusion is that the issues present “emerging consumer protection risks” for reverse mortgage borrowers. GAO makes a number of recommendations to improve consumer protections including that the heads of all federal agencies responsible for oversight of the mortgage lending industry improve their consumer awareness and oversee better industry marketing practices as well as claims related to reverse mortgage products.
The reverse mortgage industry has always been a lifeline to seniors, and now that the Government Accountability Office is aware of existing corruption, HUD can work to help reverse mortgages continue to provide opportunities for homeowners.
A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has helped over 3000 Americans find financial security with a reverse mortgage. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of “62 Senior Moments.” If you would like more information, please call (866) 683-3690 or visit our Reverse Mortgage Calculator.
Article Source: GAO warns on Reverse Mortgages
Article Directory: Article Dashboard http://www.articledashboard.com
More Mortgage Stuff:
The HECM reverse mortgagehas historically provided an advantageous opportunity to senior homeowners who struggle to manage their bills post-retirement. At its best, HECMs allow homeowners to convert equity in their homes to a tax-free income, without increased mortgage payments, and without the risk or reality of having to sell their home or sign over the title. GAO financial products like annuiti…
To understand how the reverse mortgage program works, the borrower must understand the terminology associated with the program. This program is a U.S. Department of Housing and Urban Development (HUD) initiative to ensure mature borrowers, over 62 years of age, are able to retain their independence while remaining in their current homes by using the equity. But the classic definition of the revers…
To understand how the reverse mortgage program works, the borrower must understand the terminology associated with the program. This program is a U.S. Department of Housing and Urban Development (HUD) initiative to ensure mature borrowers, over 62 years of age, are able to retain their independence while remaining in their current homes by using the equity. But the classic definition of the revers…
The number of homeowners taking out reverse mortgages tripled from 2005 to 2009, perhaps in part because retired homeowners who are strapped for cash are using these loans to turn home equity into a monthly check, says MarketWatch’s Andrea Coombes. Go to Source…
A trend for the upcoming generation of borrowers eligible for reverse mortgages shows higher debt levels than 62-year-olds from ten years ago, a National Mortgage News article reports. Alex Farber, an experienced originator who has a reverse mortgage … Go to Source…
When you have paid your mortgage for years month after month, the reverse mortgages do it in reverse. When you ask what is a reverse mortgage, the main benefit is that a lender will pay you. You just have to be American, age 62 or over and the owner of your home. 1. What Is A Reverse Mortgage, You Pay It Back When You Move Or Die. The reverse mortgages are loans, which borrowers take against the h…
When you have paid your mortgage for years month after month, the reverse mortgages do it in reverse. When you ask what is a reverse mortgage, the main benefit is that a lender will pay you. You just have to be American, age 62 or over and the owner of your home. 1. What Is A Reverse Mortgage, You Pay It Back When You Move Or Die. The reverse mortgages are loans, which borrowers take against the h…
Greenlight Financial Services will launch a newly revamped reverse mortgage division to begin operating in July. The Irvine, Calif.-based financial services company previously operated a reverse mortgage division, which closed 264 reverse mortgage loans in … Go to Source…
The reverse mortgage loans offer an opportunity to take a part of the equity out, but still to continue living in an old flat. And as long as you own your flat or house and live there, you do not have to pay the loan back. The flat remains in your name. 1. The Reverse Mortgages Allow Retired People 62 Or Older To Convert Equity In Their Homes Into Cash. This is the basic term for the reverse mortg…
The reverse mortgage loans offer an opportunity to take a part of the equity out, but still to continue living in an old flat. And as long as you own your flat or house and live there, you do not have to pay the loan back. The flat remains in your name. 1. The Reverse Mortgages Allow Retired People 62 Or Older To Convert Equity In Their Homes Into Cash. This is the basic term for the reverse mortg…
Posted in Refinance