While it isn’t surprising that I meet many advisors unfamiliar of the benefits of a reverse mortgage, it is alarming when their ignorance is costing their clients their home.
The Arrogant Advisor
A few years ago I was competing in a friendly golf tournament when my opponent, Larry – an estate planning attorney for the past 40 years — asked me what I did for a living. When I told him that I was a reverse mortgage advisor his demeanor diminished and replied, “I would never, ever recommend a reverse mortgage for any of my clients. Even if they were out of money, I would recommend anything but a reverse mortgage!”
After our match, we headed to the 19th hole and the tournament reception with other members and their spouses. It was there when Larry’s wife Carol arrived. Larry introduced me, “Honey, this is Pete. Watch out, he preys on old people and cheats their children out of their inheritance.” Carol looked perplexed and asked me what I did for a living but Larry interrupted and responded, “He sells reverse mortgages. That’s when you get a sign your home over to the bank, and get a monthly check. But when you die, the bank gets your home and your kids get nothing.”
Carol looked at me and said, “Well that doesn’t sound like a good deal at all. Why would anyone do a reverse mortgage on those terms?”
I replied, quickly so that Larry wouldn’t interrupt me again, “Well Carol, that’s because that’s not how a reverse mortgage works at all.” Several people began to gather around us to listen as I explained some of the features and benefits of the FHA insured reverse mortgage including:
- Keep your home and maintain title as long as you live in the home
- Heirs will inherit home and any remaining equity after paying off loan
- Funds can be disbursed in a lump sum, monthly payments, credit line or a combination of all three
Carol replied, “Well based on those terms, who wouldn’t want a reverse mortgage?” The other members that have gathered had agreed, except for Larry.
I noticed Larry was looking rather nauseous by my explanation that debunked his misconceived perception of the reverse mortgages. Later, he confessed to me in private, “In the last two years, I had three clients lose their home to foreclosure and now I realize that I could have saved their home with a reverse mortgage. My ignorance cost my clients their home. I regret everything I said about you and reverse mortgages.”
The following week I received a phone call from Larry’s office inviting me to make a presentation to the other law partners of the firm so they will understand the truth and benefits of a reverse mortgage for their clients.
It’s never too late.
There are many professional advisors that are unfamiliar with the realities and benefits of an FHA-insured reverse mortgage. If you are seeking to understand the truths of a reverse mortgage for you and your family, call me for a no obligation, face-to-face meeting at your home or advisors office.Questions? Contact us now!