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New York Post Skewers Reverse Mortgages

media-spoonfeeding-cartoon-300x180While negative new stories about reverse mortgages have diminished considerably a few media outlets continue to beat the drum on the dangers of reverse mortgages leaving vulnerable seniors without a home. Reading such articles reminds me of Winston Churchill’s quote “A life gets halfway around the world before the truth has a chance to get it’s pants on”.

On July 23rd the New York Post published an article entitled “Taking out a reverse mortgage ruined my life” by Catherine Curan. The story outlines the unfortunate series of events that befell Frederick Feil who lives in Howard Beach, a suburb of southwest Queens, New York…

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9 Comments

  1. The Tampa Bay Times (fka St. Petersburg Times) carried a full page, front page story in May 2014 with similar circumstances. The front page slammed reverse mortgages but reading the rest of the story in the inner pages revealed failure to pay homeowner’s insurance for 5 years! As is so often the case news outlets sensationalize a tragic situation where more often than not the reverse mortgage has nothing to do with the tragedy, We are seeing a major turn to more responsible reporting in recent years as the FHA reverse mortgage program takes its rightful place as a mainstream financial planning option.

  2. Shannon,

    As usual, your response to this unfortunate event is 100% accurate and hits the nail square on the head!

    There is just nothing more to add!

    But now here is the big question: As an industry, what are we going to do about a major publication spreading such “half-truths and misinformation” to the very public we are trying so hard to assist?

    How many seniors will be “scared out of” looking in to a reverse mortgage because of this poor excuse of a journalist Catherine Curan?

    I’ll tell you what our industry is going to do…nothing! Not a damn thing!

    We are going to have a lively discussion here on your site. We’re going to defend ourselves, to each other, and then pat ourselves on the back for doing so…

    But nothing changes!

    When are we going to stand up and defend ourselves????

    • Michael,

      What is there to stand up and defend, Mike? I read the article through. I like many of my peers believe that a significant number of borrowers made some very poor decisions when it came to fixed rate Standards. This CLEARLY could be one of them.

      This article clearly blames the product. Other articles blame the originators. Even the homeowner NOW questions whether he should have sold the home rather than get the HECM. He is now in the second guessing himself stage.

      This case is an example of why we have financial assessment today. It is one way of preventing consumers who make poor financial decisions from making the wrong decision regarding a HECM. It is unclear from the story whether or not the senior would have met financial assessment qualification without a LESA.

      At least in the past, NRMLA had a team ready and willing to take on these stories. Why not start there and find out what has been done?

      • George,

        This industry NEVER defends itself to the public. With all due respect to NRMLA, If they make a statement condemning the article, who is going to read it but the insiders in our industry, like us, who already know the truth…

        How about the 5 major lenders in the industry get together and run a huge ad in the Post? Separating Myth from Reality on Reverse Mortgages?

        How about 100 of us little guys each write a check for $250.00 and spend $25,000 on an ad in this Sunday’s NY Post? (Same topic)

        And then the next month, the NY Times. And then the next month Consumer News.

        Let’s start doing something!!!

        • Mike,

          If the ad is not part of the article, the ad will have little impact. Then the war will start as to whose phone numbers should go on the ad.

          Julie agrees with you. Maybe 98 others will as well. Try it and see how it comes out. Most of us saw how the Extreme Summit went down (intended double meaning).

  3. Shannon, great commentary. When I read that article I had many of the same thoughts about the “reporters” slant. She obviously went in search of facts to justify her conclusions.
    Regardless of whether there was a reverse or forward mortgage, or even no mortgage, non-payment of property taxes could trigger foreclosure.
    Not sure I agree with “fighting back”. Our best endorsements will come from the families whose lives we have changed for the better.

  4. As a reverse mortgage lender myself, it is unfortunate that such a great product gets misrepresented by individuals who don’t understand the product and the tremendous power it can have for our clients financial well being. But it is still incumbent on the client to meet their responsibilities. I am constantly reminding individuals that a reverse mortgage will act exactly like a traditional mortgage in cases where client responsibilities are not met. I’m sad for the client, but I don’t see that the reverse mortgage was the culprit.

  5. Michael-

    You are 100% correct! FHA has done nothing to assure the consumer. Why?

    Great Suggestions, so why won’t the 5 biggest lenders do it? There has got to be fall-out attached somewhere in the “back rooms”

    Let me know when you want a check for $250.

    Best,
    Julie

  6. Shannon, has it right, unfortunately the media shares half truths. Unfortunately the negative, “poor me” stories of sensationalism attract the media.

    The industry is actually addressing the media. NRMLA has a PR person on staff, Jenny Werwa, and with her guidance NRMLA has monitored and responded to the negative, misleading articles. Some of the responses from NRMLA have even been posted as a follow-up in these media pieces.

    Through NRMLA’s PR campaign the positive stories have increased over the negative ones. This is a good thing.

    In addition to NRMLA’s direct response to the articles, there is a “Blog Squad,” made up of members of the industry, who responds with comments to articles containing misinformation either in the article or in the comment section. Where commenting is not an option, letters have been sent to the editors of the publications, sometimes in addition to the commenting done by the industry.

    The large lenders, as well as several small companies have financially supported the PR Campaign. If you wish to be a contributor, please reach out to NRMLA for details on their campaign and how to contribute.


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