Reverse Mortgages: The Cure for the Perfect Financial Storm?

Recently, (August 11, 2008) the Wall Street Journal ran an article whose title proclaimed, Economists Expect 2008’s Second Half to be Worst Than First. It pointed out that many people in this country are grappling with what I call the Perfect Financial  Storm: Layoffs, stagnant wages, falling home values and tighter credit.  The stimulus package checks  that were sent out did not do the job as the succor coincided with the increase in gas prices.  Whatever amount did not pay for fuel, the balance went into  savings and debt service.

Those of us that work with seniors on a regular basis know the value that untapped equity can play in the life of our elders. This is not to suggest that every senior should obtain a reverse mortgage. To the contrary, only an exploration of needs, options and wants will determine the appropriate path. However, the perfect financial storm precludes our elders from seeing things as they really are. Their thoughts are imbued with fear. Fear prevents action.

Costs of a bad economy cannot and should not be measured in dollars and cents. It must be measured in human terms. And as we approach the first political convention, there is a sense of perturbation as the major parties get ready to sling the mud. Most of us are neither economists nor accountants. A cipher with many zeros is meaningless to most of us. Sadly the campaigns will seek to gain our attention with the fact that this program will cost billions and that program will cost billions.

  Seniors know three things. When they can no longer pay their bills the country is in bad shape.  When every one of their friends complains that they cannot pay their bills the country is in a recession. When even their adult children are losing jobs and cannot make ends meet, the country is heading for a depression. It makes no difference that we are not close to experiencing 1929 all over again. However, what people believe to be true is more important than what really is true.  So when people feel helplessness brought on by the perfect financial storm, even the elixir of a reverse mortgage cannot ameliorate what our seniors believe to be true.

Comments

[Deanne Opstad]

Amen...