Reverse Mortgage Loan Blog

DEAR BOB: Unknown to me, my 81-year-old mother recently took out a lifetime reverse mortgage. As her daughter, I was totally unaware she was doing this. The reverse mortgage lender sent a so-called “HUD counselor” to her house to spend an hour explaining reverse mortgages. About three months after this occurred, I learned my mother paid almost $6,000 in various up-front loan fees. Considering she is in declining health and will soon have to move to an assisted-living home, I find this outrageous conduct by the reverse mortgage company. Are the HUD counselors sent by a reverse mortgage company truly independent? –Sarah S.

DEAR SARAH: The three nationwide senior-citizen reverse mortgage lenders all require counseling by certified HUD counselors who are supposed to explain to the prospective borrowers the pros and cons of such mortgages.

Of course, nobody can vouch for such counselors being truly independent of the actual reverse mortgage lender. If a counselor discourages prospective borrowers from obtaining reverse mortgages, I’m sure that person won’t be recommended by a reverse mortgage lender again.

If your elderly mother plans to stay in her home at least five years, that $6,000 for various fees is not excessive. Please remember reverse mortgages pay money to the senior-citizen homeowner, without any repayment required until the homeowner either sells the home, vacates for more than 12 months, or dies.

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