Reverse mortgage claims not true

The many choices of information sources these days tends to confuse us more and more. It is no wonder that so many of us don't believe or trust anyone. Choice is not always a benefit.
 
The recent article on reverse mortgages in The Sun is a case in point.
 
Several points made in the article are just plain false.
 
1. Reverse mortgages "are very complicated." Not so. An RM is simply another kind of mortgage where you are able to use the equity out of your house to supply money in your retirement. The difference is that you don't make payments on a reverse mortgage in your lifetime and the lender is paid for his investment after you are deceased.
 
2. The "lender eventually acquires the house." Simply not true. The homeowner keeps the title to his home and passes it along to his estate with the rest of his assets when he dies - at which time the mortgage is paid off. The payoff of the loan is guaranteed to be less than the value of the home at that time to protect heirs from any liability. The lender acquires the house only if heirs choose not to sell it to satisfy the mortgage at that time. Oftentimes, there is equity left in the house for heirs who can choose to pay off the mortgage and live there or sell it much in the same way any other kind of mortgage is satisfied when you pass away.
 
3. Since lenders on RMs don't tell homeowners what they can use the proceeds of the loan for, some misuse the funds and run out of cash at the end of retirement - which is probably better than running out of cash and living off the state in their own homes full of equity they never use to support themselves. Good judgment and prudence are always a very good thing.
 
4. Those who fritter away the proceeds of their RMs and run out of money can prevent such an event by investing the proceeds of the RM into a guaranteed lifetime income, though they are not required in any way to do so.
 
5. Arizona does not need to regulate RMs since the federal government already does so adequately  by making sure you or your heirs have no liability of any kind in the loan. Surely, the Arizona Legislature has better things to do than to duplicate considerable federal regulation.
 
Those wishing to know how a reverse mortgage would be wise to check with a professional loan officer, like myself, who are considerably more qualified to explain the RM than someone feeding off the Arizona Legislature for misinformation to fill inches in the newspaper for a fee and with little knowledge of his subject. We spend a lot of our time clearing up misinformation.
 
Good advice always comes down to choosing a local professional who provides proof to satisfy questions you may have - someone who will always be nearby and know how to supply accurate answers.
 
There is considerable good advice now available in Yuma County.


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WARREN STRYCKER
Yuma