Selleck says Reverse mortgage is ok. A gift from Reagan. Suckers beware!
By Dr. Phil Taverna
I like Tom Selleck. He can probably sell anyone anything. But lets think about this reverse mortgage. There must be a lot of money in it. All the money they spend on advertising. And paying for a superstar like Selleck somebody is making money!
So a loan is a loan. The idea is that there is equity in your home and somehow the bank and Selleck and Reagan want you to access your equity without having to move and sell it. And without having to pay it back!
I think I have a better chance of believing in the tooth fairy. I can only imagine one scenario where this will work. If you know you only have 5 years to live and you have no family and friends. And there is enough equity to borrow to pay the taxes and insurance for the next five years. So at the end of 5 years if God willing you take a dirt nap and the bank owns the property and whatever asset is left. In theory.
I guess if you are super rich and own many homes there may be a game to play as long as you live in this house a certain number of days per year to be considered your residence. The money would be tax free and gosh looks like a tax shelter. Get the money tax free. You deduct the taxes and insurance. I thought this was for old people.
The problem with all this nonsense is that the bank is betting on you dying or moving to a nursing home. And I guess the nursing home can get whatever assets can be found in the home.
The Taverna plan would be simple. The bank covers you with life insurance. So lets say your assets will only work for 10 years. And all of a sudden you are still alive. And Dr. Kevorkian is no where to be found. I guess this is why some states and countries are pushing for mercy suicide otherwise known as euthanasia.
Could you imagine Hey Doc my reverse mortgage has run out and cant afford my house any more. The bank wants to foreclose on me. I cant stand the stress. Quick give me a pill so I can end it all. You just love how the liberals think Dont you?
So the bank would take some of the assets before you reach the end and take out a life insurance policy or some type of annuity agreement that does actually bet on you living. And they would give you a set amount every year that you live to cover the insurance and taxes and maybe a little spending money to buy an ice cream cone.
If your asset increases in value that could help cover any shortcomings as long as the mortgage company allows you to access it. If your asset loses value you are screwed. The insurance could be used to cover you in that event.
Whenever a government and banks come up with a loopy plan like this buyer beware. The banks are in it to make money. They stopped being a charitable organization since the Clinton Foundation was found to be bogus. And the government is in it to get campaign contributions from banks that lobbied for the revere mortgage concept.
You know taxes are not going to go down. Under liberal plans to spend money all the time you are guaranteed that the real estate taxes will go up. So if your asset is great sell the house and move to a location that has little or no taxes especially for seniors.
Insurance may fluctuate a bit. But that probably wont increase as fast as the real estate taxes. I saw a house in PA that was increasing the taxes about $400 dollars every year. You gotta love those liberals.
Looking at the mortgage picture this is what you are doing. You are agreeing in most cases to give up your house in return for a loan. The loan you do not have to pay back.
But each month your asset is dwindling. They take out the interest fees and pay you a monthly stipend to pay your taxes and insurance. After the balance of the asset reaches a certain amount there are no more stipends. But you still are required to pay the taxes and insurance. And once you fail to do so or no longer reside there full time they can foreclose on you for breach of contract or by agreement. And they own your house!
And folks like Imus think its a good idea so the kids dont get anything. But the kids can always bet on the insurance.
It would seem to me that the best thing to do is sell your house and move and put the asset in the bank. Find a cheaper place with less taxes to pay. And when you pass the kids can fight over the money and not try to fight the bank and the nursing home for whatever money you might have left in the house.
Banks generally dont lose. In the 2008 housing crash caused by the banks ending up with the banks doing quite well. Not so for the housing market that lost $2 trillion dollars. Thanks Obama!
So think twice when you make a deal like this with the bank. There is a reason why you have to sign a thousand pages to get a mortgage. Lawyers sit down and come up with every conceivable way to screw you out of your money. And they smile when they do it.
So hopefully Selleck will think twice before he endorses such a product. Ask him would he take out a reverse mortgage? Again for the rich it may be a great deal especially if they dont want to leave any money to those damn kids!
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