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A Risky Lifeline For Seniors Is Costing Some Their Homes

Sunday, October 14, 2012 - 5:01 PM
From the New York Times
Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

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3
Ken TuminKen Tumin5,467 posts since
Nov 29, 2009
Rep Points: 124,996
1. Sunday, October 14, 2012 - 8:11 PM
Thanks Ben Bernanke...
"Some 70 percent of reverse mortgages are taken in lump sums, up from 3 percent in 2008, according to the bureau. When seniors use the money to pay off other debts, especially right before retirement or early into it, that can leave them with scarce resources to pay their property taxes and insurance."
1
ShorebreakShorebreak2,602 posts since
Apr 6, 2010
Rep Points: 14,079
2. Monday, October 15, 2012 - 1:21 PM
Being a senior does not have to mean one can do irresponsible dealings and then blame others.  Stinky Bernanke is to blame for a lot of stuff but he doesn't force seniors to take on reverse mortgages without researching ALL aspects of these dealings.  What I think is worse is every day celebrities advertise on TV how great reverse mortgages are .   They don't encourage one to check up on the problems.  They make them sound like the perfect answer especially in times when seniors and retirees can't depend on decent interest rates from CDs.  We need to hear more about the negative aspects of these products because desperate people will do desperate things when they need more income. 
2
paoli2paoli21,365 posts since
Aug 10, 2011
Rep Points: 5,982
3. Monday, October 15, 2012 - 6:15 PM
Re: Paoli2 @ 2. Monday, October 15, 2012 - 1:21 PM

"Stinky Bernanke is to blame for a lot of stuff but he doesn't force seniors to take on reverse mortgages without researching ALL aspects of these dealings."

I disagree. Every senior I know who has taken out a reverse mortgage blames the zero interest rate policy (ZIRP) of Ben Bernanke for being forced into their situations. Their incomes have been devastated. I suppose they should just sit and take it? I'm waiting for your usual recital, Paoli2, of how they should have lived more frugally and expected this to occur. Every individual has their own priorities and goals.
1
ShorebreakShorebreak2,602 posts since
Apr 6, 2010
Rep Points: 14,079
4. Monday, October 15, 2012 - 6:44 PM
Shorebreak:  Sorry to disappoint you but you won't get to hear my "recital" etc.   If they were driven into reverse mortgages due to being devastated by low interest rates that may have been caused by Bernanke.  However, it seems you were so eager to jump on me that you missed the main point of my post.  It is sad when people's lives are devastated by these low rates but "they" still have to be educated about the problems of reverse mortgages or they will bring even more financial problems upon themselves. 

Since when do I tell others how to live their lives just because I believe in living frugally?  Any posts you read from me on this subject was just sharing how "I" live my live.  I don't preach to others that they have to do the same thing.
1
paoli2paoli21,365 posts since
Aug 10, 2011
Rep Points: 5,982
5. Monday, October 15, 2012 - 8:16 PM
Re: Paoli2 @ 4. Monday, October 15, 2012 - 6:44 PM

Unless you have discovered the secret, "You can't take it with you".
1
ShorebreakShorebreak2,602 posts since
Apr 6, 2010
Rep Points: 14,079
6. Monday, October 15, 2012 - 8:42 PM
#5  "You can't take it with you" but some of us would like to be able to leave something behind for those we care about.  Maybe that isn't important to you but I would appreciate your not mocking my methods.
2
paoli2paoli21,365 posts since
Aug 10, 2011
Rep Points: 5,982
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