Comments on: Pros and Cons of Reverse Mortgages http://reversemortgageloanblog.com/2007/12/10/pros-and-cons-of-reverse-mortgages/ News and discussion about Reverse Mortgages Sun, 25 Jul 2010 01:45:16 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Corey Matelli http://reversemortgageloanblog.com/2007/12/10/pros-and-cons-of-reverse-mortgages/comment-page-1/#comment-475 Corey Matelli Mon, 10 Dec 2007 16:26:37 +0000 http://reversemortgageloanblog.com/2007/12/10/pros-and-cons-of-reverse-mortgages/#comment-475 Thank you for your article. It is rather well balanced and for the most part, objective. However, I do want to point out one very significant error which caught my attention. In the "cons", you say "you can't leave the house to your heirs". This is absolutely false. Where did you hear that? In fact, this is really something you might have wanted to put this part in your "Pros" list. Unlike a "forward" loan, the borrower holds the title to the home. It's theirs. Just like any loan against the home, the heirs may keep the home as long as they satisfy any existing liens on it. I think your comment that reverse mortgages are complicated is also a misrepresentation. When you look at the subprime mess caused by all the misunderstanding of borrowers, reverse mortgages are a cake walk in comparison. Plus, with all the consumer information steps required, reverse mortgage are among the most understood products by the time the borrower signs. Another "Pro" you left out was that, because reverse mortgages are non-recourse, the borrower/estate cannot owe more than the fair market value of the home. This means that if the balance eventually grew beyond what the home brings in by sale, the lender does not go to the borrower/heirs with their hand out for more. You did include this at the very end of your lengthy article, but this point deserves to appear in the misleadingly short "Pros" list you compiled. Thank you for your article. It is rather well balanced and for the most part, objective. However, I do want to point out one very significant error which caught my attention. In the “cons”, you say “you can’t leave the house to your heirs”. This is absolutely false. Where did you hear that?

In fact, this is really something you might have wanted to put this part in your “Pros” list. Unlike a “forward” loan, the borrower holds the title to the home. It’s theirs.

Just like any loan against the home, the heirs may keep the home as long as they satisfy any existing liens on it.

I think your comment that reverse mortgages are complicated is also a misrepresentation. When you look at the subprime mess caused by all the misunderstanding of borrowers, reverse mortgages are a cake walk in comparison. Plus, with all the consumer information steps required, reverse mortgage are among the most understood products by the time the borrower signs.

Another “Pro” you left out was that, because reverse mortgages are non-recourse, the borrower/estate cannot owe more than the fair market value of the home. This means that if the balance eventually grew beyond what the home brings in by sale, the lender does not go to the borrower/heirs with their hand out for more. You did include this at the very end of your lengthy article, but this point deserves to appear in the misleadingly short “Pros” list you compiled.

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