Mar 07 2008
Is the Reverse Mortgage a Rip Off - Part 4
(this is the final post for this series)
Let's admit it, "reverse mortgage" is a terrible name. Reverse? Who wants to go backward in life? Everyone wants to go forward! And "mortgage" is often a bad word to seniors who grew up during the Great Depression and who held mortgage-burning parties when they paid off their homes. If you had a mortgage, your goal was to pay it off as quickly as possible. Of course the goal of the reverse mortgage is to let it pay you.
The product truly suffers from a bad name. They should have called it the Home Income Plan, or Equity Unlock Program. Those names at least communicate something more positive than "reverse mortgage". But it's probably too late to change the name now that has become a main-stream product.
Ultimately, I believe that the reverse mortgage will shed its negative image and become a household term. Why? It's a great deal for many homeowners age 62 and above. Second, look at who promotes their use: consumer advocacy groups such as AARP and the National Council on Aging; government agencies such including the US Department of Housing and Urban Development (HUD), Federal Housing Authority (FHA) and the US Department of Real Estate. "Reverse mortgage" won't sound like a rip-off for much longer.
