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Wed Jun 12, 2019, 09:28 PM

Seniors face foreclosure after being sold risk-free retirement with reverse mortgages

In a stealth aftershock of the Great Recession, nearly 100,000 loans that allowed senior citizens to tap into their home equity have failed, blindsiding elderly borrowers and their families and dragging down property values in their neighborhoods.

In many cases, the worst toll has fallen on those ill-equipped to shoulder it: urban African Americans, many of whom worked for most of their lives, then found themselves struggling in retirement.

Alarming reports from federal investigators five years ago led the Department of Housing and Urban Development to initiate a series of changes to protect seniors. USA TODAY’s review of government foreclosure data found a generation of families fell through the cracks and continue to suffer from reverse mortgage loans written a decade ago.

These elderly homeowners were wooed into borrowing money through the special program by attractive sales pitches or a dire need for cash – or both. When they missed a paperwork deadline or fell behind on taxes or insurance, lenders moved swiftly to foreclose on the home. Those foreclosures wiped out hard-earned generational wealth built in the decades since the Fair Housing Act of 1968.

https://www.msn.com/en-us/money/retirement/seniors-face-foreclosure-after-being-sold-risk-free-retirement-with-reverse-mortgages/ar-AACKhpC?li=BBnbfcL

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Reply Seniors face foreclosure after being sold risk-free retirement with reverse mortgages (Original post)
Yo_Mama_Been_Loggin Jun 12 OP
dflprincess Jun 12 #1
Wellstone ruled Jun 12 #2
dflprincess Jun 12 #3
Wellstone ruled Jun 12 #4
dflprincess Jun 12 #5
Wellstone ruled Jun 13 #16
dixiegrrrrl Jun 13 #17
liberal N proud Jun 12 #7
calimary Jun 13 #13
mountain grammy Jun 13 #14
SunSeeker Jun 12 #6
Politicub Jun 12 #8
czarjak Jun 12 #9
gristy Jun 12 #10
DeminPennswoods Jun 12 #11
kimbutgar Jun 12 #12
a kennedy Jun 13 #20
benld74 Jun 13 #15
MagickMuffin Jun 13 #18
MichMan Jun 13 #19
Codeine Jun 13 #21

Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 09:43 PM

1. When Fred Thompson was doing ads for these he'd mention that they were part of a bill signed

by Reagan. That immediatly made me suspect it wasn't a good deal for the middle class.

And I notice more recent ads have stopped mentioning his name.

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Response to dflprincess (Reply #1)

Wed Jun 12, 2019, 10:07 PM

2. This is a serious issue.

We have several couples in our Village whom bought into this scam only to be facing loss of their homes. There is no free lunch. These folks just assumed they would not have to pay any of the expenses like Taxes and Insurance. And the take out,is not worth the grief.

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Response to Wellstone ruled (Reply #2)

Wed Jun 12, 2019, 10:36 PM

3. I did not mean to make light of it

One of my friends got it into her head this would be a great deal for her parents. I, and another friend, got worried when the friend pushing it clearly had not dug into it. So, we got hold of one of the siblings we knew would do her homework and she put a stop to it. (God bless my pal, she'd do anything for you, but we knew if we told her this was a bad idea she'd push it harder, but we knew her sister would be listened to.)


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Response to dflprincess (Reply #3)

Wed Jun 12, 2019, 10:52 PM

4. Just because one recieves a check monthly

from whom ever the Reverse Mortgage Company is,that does not mean all other expenses automatically cease. Couple of the mentioned couples thought they could pass their Homes onto their Children and set up their Wills accordingly. Well that no can do. Unless you repay all of what one has received plus interest and fees. Sad part is,the Transfer of Title is only in one of the Couples name and if he passes. Well she is out on the street. If she had been a signee on the Title at transfer,she would be allowed to stay and receive her same monthly stipend.


Believe Minnesota Real Estate Law has some type of Homestead Covenant that forbids this type of Foreclosure Actions to take place if the Property is covered under the State Homestead Rules. When the couple first purchased the property.

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Response to Wellstone ruled (Reply #4)

Wed Jun 12, 2019, 10:56 PM

5. I don't understand how this can be legal

the creeps who prey on people and steal their homes should be in prison.

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Response to dflprincess (Reply #5)

Thu Jun 13, 2019, 12:40 AM

16. Liz Warren warned the Nation as to what

was going on and the Media said nothing. It might upset the Ad Department. Now with Mnuchin,he has rolled back the Consumer Protection Rules. We have not seen the real ugly to come.

There was one of these so called information Meetings at our Club House Last Fall. Understand several people signed up for these Rip Offs believing the B.S. and some have already are having issues do to what I mentioned before.

Sorry to say,these are mostly retired Military and not going to say who or what their politics are but your guess should be easy.

Folks do not understand that they can not just sell their homes or cash out and move or go live with the Kids. Course,that is what ultimately Happens anyway or become homeless.

Sad that it is perfectly legal to Market these as a Investment type of tool.

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Response to Wellstone ruled (Reply #2)

Thu Jun 13, 2019, 03:35 PM

17. That's a pretty dumb assumption if they were paying it all along.


If the mortgage company sold them the house insurance, as they usually do, the premiums are very high.
So the owners thought a new loan/reverse mortgage would include everything that went into escrow for the original loan?

we ended up with our payments going to Ditech, which used to be a sleazy collection company, and jumped into the mortgage serving biz after the 2008 crash.
Ditech hated that our mortgage allows us to pay our own insurance ( we don't have to pay any property taxes) because they make a fortune on their escrow income.

Ditech is now in bankruptcy process for various crimes and misdemeanors that have caught up with them.

I shan't miss those breathless monthly offers for a reverse mortgage.

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Response to dflprincess (Reply #1)

Wed Jun 12, 2019, 11:19 PM

7. Another Regan problem hurled on Americans

I fear the effects of trump will last much longer

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Response to dflprincess (Reply #1)

Thu Jun 13, 2019, 12:09 AM

13. That would be a red light to me.

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Response to dflprincess (Reply #1)

Thu Jun 13, 2019, 12:25 AM

14. Yes, I remember those ads..

a bit creepy, then Reagan. Bad deal.

So many of us believe we could never be scammed, but it's easy. It's happened to me (on a small scale) luckily, something I could recover from in a couple of years, but it taught me. Still, sometimes things sound so good and all that print is so fine... watch out y'all. America's a cruel place, not much room for error.

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 11:18 PM

6. Yep. A neighbor lost her home, at 94, because of a reverse mortgage.

It was really sad. She kept saying: "I just lived too long."

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 11:23 PM

8. There are some vile people out there

People who prey on seniors need to be imprisoned for a long time.

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 11:29 PM

9. You mean the Tom Selleck endorsed reverse mortgages by any chance?

“I trust ____, I think you can too”? Famous last words, rubes.

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 11:42 PM

10. This is a very good, well-researched article.

Kudos to USA Today and reporters Nick Penzenstadler and Jeff Kelly Lowenstein.

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 11:53 PM

11. If it sounds too good to be true, it probably is

Tom Selleck as the pitchman for this product made me immediately suspicious.

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Response to Yo_Mama_Been_Loggin (Original post)

Wed Jun 12, 2019, 11:53 PM

12. My aunt was married to a guy who she divorced from who did a reverse mortgage

He was a Tuskegee airman who lost his house at age 97 because he outlived the reverse mortgage, he died a 4 months later after they foreclosed on his house he owned for 40 years,

Every time I see those Tom Selleck commercials I curse him for scamming elderly people.

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Response to kimbutgar (Reply #12)

Thu Jun 13, 2019, 09:45 PM

20. I was just going to say FAWK TOM SELLECK.

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Response to Yo_Mama_Been_Loggin (Original post)

Thu Jun 13, 2019, 12:29 AM

15. Reverse mortgages were scam from Day 1

Sort of like the
Balloon payments on certain mortgage loans

Anything that sounds too good to be true

IT IS

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Response to Yo_Mama_Been_Loggin (Original post)

Thu Jun 13, 2019, 03:53 PM

18. Unfortunately, they got my neighbors home, well the State of Texas took it

She got scammed by "You have won a million dollars, we just need you to send us some money first, then we can send you your millions!"

She reversed mortgaged her home. She sent them the money she received.

She told a church friend who called Adult services and they carted my neighbor away to a nursing home. I had no idea this was going on or I would have intervened.

She got scammed twice.



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Response to Yo_Mama_Been_Loggin (Original post)

Thu Jun 13, 2019, 09:12 PM

19. Did the homeowners just think it was free money and they still got to keep their homes anyway?

I am not understanding how people like Mr. Roebuck received $100K and thought they would still own their homes free and clear afterwards? Did they think it was just free money ?

"Leroy Roebuck’s home was appraised at $112,000 in 2008. That allowed him to take out up to $83,000 in equity. By the time he was solicited for a second reverse mortgage, an appraiser said it was worth $241,000, allowing him up to $163,000 more. He borrowed $102,000 in all."

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Response to MichMan (Reply #19)

Thu Jun 13, 2019, 10:13 PM

21. It's worrying that people can make

such foolish decisions. That does not, of course, justify predatory loan practices.

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