Scammer sentenced, Carson talks reverse mortgages, Walter faces possible de-listing from NYSE
In this week’s edition: HUD Secretary Ben Carson supports reverse mortgage program while speaking for the need for reform. The New York Stock Exchange puts Walter Investment on notice. US Postal Service nabs reverse mortgage scammer in a sting operation. The best & worst uses of a reverse mortgage.
While Dr. Ben Carson is settling into his new job as Secretary of the Department of Housing and Urban Development, he did take the time to note both his support and the need for reforms of the Home Equity Conversion Mortgage program. Speaking before the Leading Age Florida convention, Carson stated “More and more of our citizens are over 65 years of age … about 15 percent, nationally. And, as our nation ages, we must become wiser, smarter, while expanding choices for seniors.”
A successful con requires confidence on the part of the scammer. This time Kemal Barnes had the tables turned on him after scamming over $120,000 a 79-year old Texas woman according to the Boston Globe. Barnes began his con game while living in his native Jamaica and continued while living in Massachusetts. The victim’s son notified authorities in 2015 after
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To “supplement income” through HECM proceeds may be prudent but not if those payouts will drain the line of credit before normal life expectancy UNLESS the borrowers have been advised by competent medical advisers that their life expectancy is substantially less than published tables.
While the strategy to increase Social Security benefits through replacing them with HECM proceeds is rarely advisable, without sufficient advice from someone is competent (not in retirement income matters but) retirement cash flow management, there may be times when the results look reasonable when in fact they are not. The higher the replacement amount must be, the less advisable the strategy becomes. Health and life expectancy are all important factors that must be considered in whether or not the strategy will work for the borrower.
What income is being suggested to be replaced when it comes to reducing the income tax on Social Security benefits? Replacing required minimum distributions from retirement plans or IRAs is NOT advisable. Those who are advising a change in distributions from those qualified retirement plans and IRAs need to be careful not to violate the minimum threshold of the DOL fiduciary standard UNLESS one is sure that the advice being given falls within those guidelines. Seniors contemplating a change to their income should be advised by qualified, independent, and competent advisers who do not profit from the taking out of a HECM. Those who originate HECMs and are the sole advisers on such matters are NOT independent or without bias.