It Is Too Easy To Criticize Reverse Mortgages

Bold face criticism of reverse mortgages is easy to accomplish. Any aspiring pundit can criticize the program. It is easy to be a naysayer. It is easy to say, “This is no good” or, “That will not work”. While the program is far from perfect, there are improvements that could be made, actually must be made. I will discuss this in subsequent posts. The point I wish to make here is that I would like to see criticism of the program be accompanied with suggested solutions.

Treasury Secretary Hank Paulson has been criticized over the far reaching housing bill that passed Congress.  Secretary Paulson was quoted as saying, “When I talk to people, there are a whole lot of them that say: “I don’t like this,” “I don’t like that”, “I don’t like the other thing”. “I say, neither do I. What idea do you have? What do you think we should do next?

I have come to the conclusion that many of those those professionals that bash the program are merely pandering to their clients. A good number of these professional haven't even done the research.  I suppose that it is safer to leave the client in their status quo, rather than offer a solution that that the client could possibly question later.

There are very fine accountants, attorneys and financial planners that have done their research and in prior days would have preferred other strategies. Many of these strategies are no longer available. Now they have become ardent supporters of the program.

Comments

[Cindy Fox]

As with any commentary, emotion gets attention. The critism of the Reverse Mortgage stems, i believe from lack of information. As a reverse mortgage professional, there are lives that have changed as a result of the reverse mortgage. I have also explored other options with clients because this program is just not for everyone. Any blanket statements about programs and products, again, show the individual (s) making these statements are in need of further information. Nothing is so simple to not have another side to the story.

[Richard Woychowski]

You make the comment, "while it is far from perfect". I am not a financial planner, nor do I have an MBA. I am just a mortgage loan processor who has been looking at loan documents and peoples person financial lives for the past 17 years. I personally think the reverse mortgage is the closest thing to a "perfect loan". Is there any other loan program out there that offers the client the feature of ABSOLUTELY NO PERSONAL LIABILITY for repayment of the debt? The only other thing that would make it more PERFECT is if it were free.

Oh, I forgot, we are the "entitlement attitude" society. Somewhere in the constitution I am sure it says the reverse mortgage should be free along with heathcare and gas.