“So Many New Companies Getting into the Reverse Mortgage Business”

“So Many New Companies Getting into the Reverse Mortgage Business”

 

 

There was a time when seniors that were in trouble with their mortgage or other debts could get a reverse mortgage and that was a good solution for them. They could end up living in the home for years to come without worrying about a mortgage payment. That is not the case these days. Folks in default or foreclosure cannot qualify for a reverse mortgage.

 

These days credit matters and a huge segment of the reverse mortgage market has gone away. The qualifying process is much more restrictive and even folks that have decent credit may not qualify. OK, so why are so many getting into the reverse side of the mortgage business?

 

The answer is simple; companies are looking for more volume. There are basically a handful of actual buyers of these mortgages, which means other lenders are brokering this business to these buyers.

 

My frustration with this segment of the market is that many really don’t need a reverse mortgage, but with all of the marketing many seniors will get hooked and do one of these mortgages and really shouldn’t.

 

Having said all that, we do reverse mortgages and for some it is the right decision and will allow folks to stay in their home for years to come. It takes a lot of understanding to make sure that a reverse mortgage is the right solution.

 

Image courtesy of Ponsulak/freedigitalphotos.net

Subscribe to my blog via Email:

 

Enter your email address:

Delivered by FeedBurner

 

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

Like me on facebookfollow me on twitterConnect with me on linkedin

Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

Comment balloon 27 commentsJoe Petrowsky • October 22 2015 07:55AM

Comments

Hi Joe.  One size does fit all.  You tailor your mortgages to the borrower's needs.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) about 3 years ago

Joe: Reverse mortgages are definitely not the be-all for every senior. All the more reason they need to speak with an honest mortgage professional.

Posted by Anita Clark, Realtor - Homes for Sale in Warner Robins GA (ColdwellBanker SSK Realtors ~ 478.960.8055) about 3 years ago

Good Morning Joe: Seniors are the ones who get scammed easily by the scumbags. This is unfortunate as they become prime targets of the criminals too who call them about delinquent taxes or IRS penalty. And some did fall for this scam.

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) about 3 years ago

Joe - the hype on this is all over the place.  It is not the must do thing and people need to know if it is the right choice.  I know they will get the right help from honest brokers.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 3 years ago

Hi Joe.  These loans are more often than not the wrong decision for most seniors.  

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 3 years ago

WOW! I take this as a warning to all seniors/baby boomers who aren't as lucky to have someone like you coach them and guide them properly when making big decisions like this. It's scary to think, many will be duped by people in business motivated by greed. Taking advantage of the elderly by enticing them Reverse Mortgage is the best avenue for them (when it may harm them and their heirs) should be a crime. 

Posted by Patricia Feager, MBA, CRS, GRI,MRP, Selling Homes Changing Lives (DFW FINE PROPERTIES) about 3 years ago

No one answer is right for everyone...we have een asked abut this for couples in a variety of different situation...no heirs no cares...financial need....and we refer them to the experts.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 3 years ago

Joe, I have heard some horror stories about reverse mortgages. 

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 3 years ago

Seniors are unfortunately targets for all sorts of financial "solutions" to problems they don't have. They have to be constantly on guard.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com) about 3 years ago

 I have heard some negative results with this type of mortgage, so many seniors need some real guidance before signing on the dotted line...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Condo & Home Sale Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) about 3 years ago

Good morning Joe.  Thankfully we don't need a reverse mortgage.  However, there is always tomorrow and we'll see.  

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty AR LLC) about 3 years ago

Good morning Joe,

As you are looking for referral's and have great customer service you will fit them to what they need.

I get two or three each day wanting to give me  a reverse mortgage; I politly say no!

Make yourself a great day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Howard Hanna Real Estate Services) about 3 years ago

Good morning Joe. The key to the use of a reverse mortgage is an HONEST mortgage broker. The reason many are getting in the business is the outrageous fees typically attached to this type of loan. It is a program that benefits the very few! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) about 3 years ago

Joe, we too have many mortgage companies offering the reverse mortgage to seniors.  I do not think it is for everyone.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373) about 3 years ago

Good morning, Joe -- do you mean people shouldn't believe those late night advertisements from the movie and television stars from the past touting the benefits of reverse mortgages?   

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) about 3 years ago

Good morning Joe. I never understood this and your explanation is viable. Your thoughtful consideration would be something anyone should and does want.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 3 years ago

Hi Joe Petrowsky People borrow based on payments. When there are no payments it becomes very attrasctive to them, but what they don't realize is that it is a loan, and a loan at a high rate of interest.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 3 years ago

Joe glad to here you are now doing the reverse mortgages.  If I have a Borrower who needs to do one I will send them your way.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 3 years ago

Is counseling still a requirement before seniors take out a reverse mortgage? It is, or has been, here in California. They can be good, but are costly and one might need to sell at an inopportune time.

Posted by Lottie Kendall, Helping make your real estate dreams a reality (Compass) about 3 years ago

Like most products, it's always about finding the right fit for someone's needs.  Only truely professionals will recomend their products to the right clients.  Reverse Mortgages are probably the most mis-understood product in our industry.

Posted by Mark Daly (Group One Mortgage) about 3 years ago

Mortgage guys are hot to trot right now to hop on that reverse mortgage bandwagon. I don't think they are misunderstood at all. I think many agents don't really like reverse mortgages because of the potential for abuse.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 3 years ago

Feast or famine like lots of products, industry right Joe Petrowsky ?

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) about 3 years ago

Joe

Glad you also do reverse mortgages, and understand it.  It is one of the most misunderstood products on the market, and the TV commercials really make it sound heaven sent.  Your ethics are impeccable. A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) about 3 years ago

I avoid reverse mortgages for a reason you mentioned - so many are selling the product to the wrong demographic, similar to what was done with pay option ARMs before that segment got dessimated by Dodd-Frank.  I have no interest in playing in that pool.  Like most non-conforming products, it's a great one for the right client.

Posted by John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) about 3 years ago

It is sad that most real estate agents are unable to identify the situations where they should suggest a reverse mortgage.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) about 3 years ago

I have had a few clients lately on short sales and they were reverse mortgages.  When the income runs out it gets to be a very desperate situation

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 3 years ago

Joe 

Thanks for sharing your insight on reverse mortgages  . . . . They are one on the choices seniors have . . . . Seniors need to work with a mortgage professional to help guild them in the mortgage process.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 3 years ago

Participate