JGibbs wrote:

Lexie wrote:
That's just wrong but I understand how it could happen. We need to look after our older folks. My brother and I have kept close tabs on mom for a long time now just so something like this wouldn't happen.

My grandfather has had trouble because back in his day, a person's word meant more. Communities were smaller and neighbors chatted, so word got around quickly if you weren't someone trustworthy to do business with. My grandfather still tends to trust everyone now. It's tough.

Hopefully your grandfather listens to you!

Lexie wrote:
That's just wrong but I understand how it could happen. We need to look after our older folks. My brother and I have kept close tabs on mom for a long time now just so something like this wouldn't happen.

My grandfather has had trouble because back in his day, a person's word meant more. Communities were smaller and neighbors chatted, so word got around quickly if you weren't someone trustworthy to do business with. My grandfather still tends to trust everyone now. It's tough.

Basically, they take advantage of the elderly, who are the primary base to use a reverse mortgage. They sometimes don't know what the true value of the house is so they scam them that way. Its horrible.[/quote]

That's just wrong but I understand how it could happen. We need to look after our older folks. My brother and I have kept close tabs on mom for a long time now just so something like this wouldn't happen.

Lexie wrote:

FrankN wrote:

Lexie wrote: Well if you didn't have any family members to give the proceeds of the sale of the house (or the house itself), it may make sense. If you wanted to live in your home, but wanted to get the cash proceeds from it, you could do this.

Ahhh. I had not thought of this. That would be the perfect set up. If not for my children, I might even consider it myself. I've always wanted to take a cruise and do a little traveling. I do hope seniors with no children will see this. They deserve some good times.

Absolutely. However there are a lot of scammers in this industry as well. They can always sell their home for a fair market price, move to a rental place, and use the money for retirement as well.

Need input FrankN. How does someone scam on a reverse mortgage? I don't have a vicious bone in my body so I really can't think like that. People are so greedy![/quote]

Basically, they take advantage of the elderly, who are the primary base to use a reverse mortgage. They sometimes don't know what the true value of the house is so they scam them that way. Its horrible.

Lexie wrote: Need input FrankN. How does someone scam on a reverse mortgage? I don't have a vicious bone in my body so I really can't think like that. People are so greedy!

I'm not Frank, but on American Greed the scammer promised the elderly victim a new home without the elderly person knowing what was really going on and what reverse mortgages were meant for. The reverse mortgage was based on an inflated price and the elderly person couldn't keep up with the taxes, maintenance, and insurance. By the time the scheme was uncovered, the scammer was long gone with the fees and it was more about swindling the bank than anything else.

FrankN wrote:

Lexie wrote: Well if you didn't have any family members to give the proceeds of the sale of the house (or the house itself), it may make sense. If you wanted to live in your home, but wanted to get the cash proceeds from it, you could do this.

Ahhh. I had not thought of this. That would be the perfect set up. If not for my children, I might even consider it myself. I've always wanted to take a cruise and do a little traveling. I do hope seniors with no children will see this. They deserve some good times.

Absolutely. However there are a lot of scammers in this industry as well. They can always sell their home for a fair market price, move to a rental place, and use the money for retirement as well.[/quote]

Need input FrankN. How does someone scam on a reverse mortgage? I don't have a vicious bone in my body so I really can't think like that. People are so greedy!

Lexie wrote: Well if you didn't have any family members to give the proceeds of the sale of the house (or the house itself), it may make sense. If you wanted to live in your home, but wanted to get the cash proceeds from it, you could do this.

Ahhh. I had not thought of this. That would be the perfect set up. If not for my children, I might even consider it myself. I've always wanted to take a cruise and do a little traveling. I do hope seniors with no children will see this. They deserve some good times.[/quote]

Absolutely. However there are a lot of scammers in this industry as well. They can always sell their home for a fair market price, move to a rental place, and use the money for retirement as well.

Well if you didn't have any family members to give the proceeds of the sale of the house (or the house itself), it may make sense. If you wanted to live in your home, but wanted to get the cash proceeds from it, you could do this.[/quote]

Ahhh. I had not thought of this. That would be the perfect set up. If not for my children, I might even consider it myself. I've always wanted to take a cruise and do a little traveling. I do hope seniors with no children will see this. They deserve some good times.

Lexie wrote: Maybe I'm not thinking straight here FrankN, but I can't imagine why anyone would take a reverse mortgage on their home. Maybe to pay off other debts? I don't know. I assume that when all is said and done, the sale of the estate pays off the mortgage? It's really something to think through isn't it?

Well if you didn't have any family members to give the proceeds of the sale of the house (or the house itself), it may make sense. If you wanted to live in your home, but wanted to get the cash proceeds from it, you could do this.

Joker wrote: Taxes on a reverse mortgage are a two edged sword. On the one hand, the money you get in cash, payments or both is not considered earned income and is therefore not taxable. On the other hand, you cannot deduct the interest you accrue can not be deducted on your return until you have paid the loan back in full. Kinda a catch 22.

This really sounds like a good way to screw over your children when you are gone. Ha! Again, I ask why would you take a reverse mortgage unless you really, really, really needed the cash for something else? I see more disadvantages than advantages.

Taxes on a reverse mortgage are a two edged sword. On the one hand, the money you get in cash, payments or both is not considered earned income and is therefore not taxable. On the other hand, you cannot deduct the interest you accrue can not be deducted on your return until you have paid the loan back in full. Kinda a catch 22.

Maybe I'm not thinking straight here FrankN, but I can't imagine why anyone would take a reverse mortgage on their home. Maybe to pay off other debts? I don't know. I assume that when all is said and done, the sale of the estate pays off the mortgage? It's really something to think through isn't it?

Joker wrote: According to one commercial I heard, you have to pay back when the last borrower leaves the home. That poor woman must not have been on the reverse mortgage paperwork. Many older women let their husbands take care of all the financial stuff and they just keep the home fires burning. What a shame for that poor woman.

Its usually not a very good deal, but in some cases it makes sense. Overall you usually take a pretty big haircut on your home.

According to one commercial I heard, you have to pay back when the last borrower leaves the home. That poor woman must not have been on the reverse mortgage paperwork. Many older women let their husbands take care of all the financial stuff and they just keep the home fires burning. What a shame for that poor woman.

Somewhere along the line I heard one of the horror stories about reverse mortgages. The husband passed away and because the wife couldn't pay back what they had "borrowed" she was forced to move. I don't really know how they work either. Maybe someone here could enlighten us all.