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Syndicated Financial Columnist Evolves on Reverse Mortgages

Reverse mortgages, once risky, have grown safer in recent years

A financial columnist who used to be negative on reverse mortgages recently acknowledged that they can be a good product in the right situation. Here’s an article highlighting Benny L. Kass’s evolution on the subject:

Syndicated Financial Columnist Evolves on Reverse Mortgages

A syndicated financial advice columnist who once only recommended reverse mortgages as a last resort has changed his tune.

In response to a question from a reader about why people are afraid of reverse mortgages, Benny L. Kass — whose work appears in the Chicago Tribune, Washington Post, and other national papers — said that in the past, he was turned off by high upfront costs, lax regulation of the industry, and television commercials featuring well-known pitchmen.

“For years, celebrities like Fred Thompson, Henry Winkler, and Pat Boone were touting the benefits of reverse mortgages, but they were not disclosing all of the facts, all the pros and cons,” Kass wrote.

But Kass allows that the Financial Assessment changes, as well as the counseling requirement, have convinced him that borrowers can’t enter into a Home Equity Conversion Mortgage without learning about the product.

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If you’d like to read Mr. Kass’s original article, here’s an excerpt:

Reverse mortgages, once risky, have grown safer in recent years

Q: I have a friend who owns his home outright. He is experiencing financial difficulty but refuses to look into a reverse mortgage because an attorney friend of his told him to stay away from reverse mortgages. In my opinion, a reverse mortgage sounds like the only way for him to go since he has no wife or children to consider when he passes. Any ideas why people are afraid of reverse mortgages?

A: That’s a very good question. Over the years, I have often written that a reverse mortgage should be the last resort; see if you can get a new loan or refinance your existing mortgage before looking at a reverse.

Why was I so negative? Two reasons: First, the upront costs were very high, and second, all too often there was no regulation and no enforcement against the reverse mortgage lender. For years, celebrities like Fred Thompson, Henry Winkler and Pat Boone were touting the benefits of reverse mortgages, but they were not disclosing all of the facts, all the pros and cons.

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