NRMLA’s “Blog Squad” activated this week to respond to several inaccurate and negative comments posted to the CNBC.com article, “Strapped retirees are turning to reverse mortgages.” The original piece includes interviews with a HUD spokesperson and two financial advisors who explain the HECM program, recent policy changes, and some perspectives on why homeowners might take advantage of a reverse mortgage.
Confused readers who took to the comments section to rail against reverse mortgage loans revealed a general misunderstanding of how HECMs actually work. Commenter Jonathan Hanley wrote: “It’s shocking how this article fails to mention that reverse mortgages can be foreclosed upon if the homeowner draws all the equity. The homeowner is required to then make regular mortgage payments – which they can’t afford. The bank then forecloses on someone in their late 70’s.”
Blog Squadder Dan Hultquist, CRMP, of Open Mortgage Corporation, set the record straight with the following rebuttal: “Sorry Jonathan. That is clearly incorrect. Not sure where you picked up that misconception, but ‘drawing all of the equity’ has never been a maturity event that causes the loan to be due. In addition, I have never seen a reverse mortgage that required “regular monthly mortgage payments.”
Beth Paterson, CRMP, of Greenleaf Financial, and Mary Katherine Quasarano, of Celink, provided additional comments.
Members are invited to join and expand our Blog Squad. If you would like to participate, please email Jenny Werwa, Director of Public Relations, at email@example.com to learn more about joining the team.