If you or a loved one are considering a reverse mortgage, please read this article.
You should know that the subprime predators, those who are still in the industry and not in jail or sent packing, have moved into the reverse mortgage business. I noticed the trend almost immediately when subprime programs were being shut down, lead generation companies and seminar companies all shifted their interest into reverse. I also noticed a sudden increase in discussion by notary signing agents teaching each other how to close reverse mortgages.
As an industry insider, I know that notary signing agents mainly serviced subprime type of lending so if they were moving into reverse mortgage closings I took that as confirmation of my original concerns.
Boy, who could find a more vulnerable group of people than the elderly. It's not that older individuals are unintelligent, it's that they come form a different era when crooks were more easily noticed. It's one thing to see a shady character and cross the street, it's another thing to see a company on the TV with very fancy commercials and recognize them as crooks.
The elderly are also sometimes lonely and if a nice person comes to visit, well their guard just might be down.
I'm particularly upset that the crooks have moved into reverse mortgages because I like the product. I have been following the evolution of reverse mortgages for many years and the version that HUD has out their now, available through reputable mortgage lenders like Wells Fargo Bank, NA, is wonderful.
My advice is that you work with a reputable bank rather than a mortgage company. I also suggest that you do NOT allow the mortgage lender to invest ANY of the loan proceeds for you.
You are the master of your money. Using the equity in our home to assist in cash flow after retirement is what I may do later in life. I like the program that much, but as Ronald Reagan said, trust, but verify. Work with reputable companies and keep your eyes wide open.