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Reverse Mortgages Spike 20% In 2013 As Baby Boomers Scramble For Cash

Tyler Durden's picture




 

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

So what exactly is a reverse mortgage?

In a nutshell, it’s a specific type of home equity loan available only to people aged 62 and over, which has the added benefit of not carrying any interest payments and is only due upon death or once the homeowner is no longer using it as a primary residence. As you can see, this might be viewed as an attractive cash flow option for older Americans who didn’t save for retirement. That could be a lot of people, considering that Fidelity estimates 48% of baby boomers have not put away enough to retire.

While I have covered the various ways in which Americans are scraping by in the current feudal economy, from food stamps and disability fraud, to student loans and living in mom and pop’s basement, this reverse mortgage thing is a piece of the puzzle I have been missing.

These mortgages are not insignificant either. According to Inside Mortgage Financeoriginations were up 20% in 2013, hitting $15.3 billion. So when you see that older guy working the cashier at Wal-Mart and wonder to yourself how he is surviving, the answer may increasingly be a reverse mortgage.

Oh, and since the FHA is originating many of these loans, you the taxpayer will be on the hook!

Let’s start out with some excerpts from the U.S. Department of Housing and Urban Development’s post: Frequently Asked Questions about HUD’s Reverse Mortgages.

The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program, which enables you to withdraw some of the equity in your home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more.

 

1. What is a reverse mortgage?

 

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you.  However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

 

5. What are the differences between a reverse mortgage and a home equity loan?

 

With a second mortgage, or a home equity line of credit, borrowers must make monthly payments on the principal and interest.  A reverse mortgage is different, because it pays you – there are no monthly principal and interest payments.  With a reverse mortgage, you are required to pay real estate taxes, utilities, and hazard and flood insurance premiums.

See there really is a magic money tree. Thanks FHA!

6. Will we have an estate that we can leave to heirs?

 

When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid.  All proceeds beyond the amount owed belong to your spouse or estate.  This means any remaining equity can be transferred to heirs.  No debt is passed along to the estate or heirs.

Moving along, we learn from the New York Post that:

Cash-strapped baby boomers, taking the TV advice of the Fonz and former US Sen. Fred Thompson, have opted for reverse mortgages in increasing numbers.

 

Inside Mortgage Finance, a trade publication covering the housing industry, said borrowers took out some $15.3 billion of these loans last year, an increase of 20 percent over 2012.

 

Reverse mortgages, which let homeowners age 62 and up borrow money against the value of their homes, have become a popular way for boomers without significant assets to fund retirement.

Is this something you’d expect to see five years into a genuine economic recovery, or it is a reaction to a ponzi consumption based economy plagued with zero income growth?

“I would only consider the reverse mortgage as a last resort. They cost a lot, and there are better ways to pay for retirement,” said Charles Hughes, a financial adviser.

 

“Gone are the days of gleefully burning the mortgage and passing the home on to the children,” he adds in a client publication.“They can be a valuable tool for those who need cash and have no other option,” says adviser Anthony Ogorek. Nevertheless, Ogorek asks clients to explore every option before taking the pricey loans.

 

Yes, a home with a reverse mortgage will never be foreclosed on in the owner’s lifetime. But it can be a different story for heirs, whom lending companies can strong-arm to pay the mortgage off in full after the borrower dies, under threat of foreclosure. At the very least, it means dealing with often-confusing red tape in a time of grief and stress.

 

For these unfortunates, a reverse mortgage was literally mortgaging the future.

USA! USA!

Reuters provided a similar perspective a couple of weeks ago:

U.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage.

 

Many retirees haven’t saved enough to cover expenses for the rest of their lives. But many of them have one major asset – a home. A reverse mortgage allows them to borrow against that, and they don’t have to make any payments on the loan until they move or die.

 

Borrowers took out $15.3 billion of the loans in 2013, an increase of 20 percent from the year before, according to industry publication Inside Mortgage Finance. The record year was 2009, when there were $30.21 billion of reverse mortgage loans made.

 

But at this stage, most bigger lenders are uncomfortable with the loans – for example, in 2011, Wells Fargo & Co and Bank of America backed out of the business. Wells has cited factors including unpredictable home values and the level of delinquencies as reasons for it to stay away from reverse mortgages.

 

The government agency that guarantees these loans, the U.S. Federal Housing Administration, found them to be risky, too. Losses on reverse mortgages were a big reason for the agency’s $1.7 billion taxpayer bailout last year – and some experts worry it could end up in similar trouble again.

 

“The FHA is at risk from these loans, and the taxpayers are at risk too,” said James Bothwell, a consultant and former chief operating officer of the Federal Home Loan Bank system.

Ah, always nice to see that the government is willing to put the taxpayer on the hook for loans so risky even the banksters won’t touch them.

Every day, 10,000 baby boomers turn 65, the traditional retirement age in the United States. And 48 percent of them report they are not on track to cover the basics in retirement, according to financial services company Fidelity. Sixty percent have less than $100,000 in retirement savings, estimates brokerage Charles Schwab Corp.

Walter’s larger rival, Ocwen Financial Corp, estimates the potential size of the reverse mortgage market at $1.9 trillion, leaving a lot of room for growth from the $90 billion of these loans outstanding at the end of September.

 

Lenders charge high fees for making these mortgages, and then bundle them into U.S. government-guaranteed bonds that are sold to investors. The margins on selling these loans can be three to five times the margins on regular mortgages, said Don Currie, president of lender High Tech Lending. Banks can also collect fees for performing tasks like sending out account statements to borrowers.

 

To tout the benefits of the product, reverse mortgage lenders have turned to Hollywood pitchmen. Liberty Home Equity Solutions, which Ocwen purchased in April 2013, uses Robert Wagner, star of the “Hart to Hart” television series, in its advertisements. Commercials for Quicken Loans’ One Reverse Mortgage featured “Happy Days” star Henry Winkler. Fred Thompson, a former U.S. Senator and star on television’s Law & Order series, promotes loans for American Advisors Group.

Hollywood, good for pumping Obamacare and reverse mortgages. Nice.

“There are lots of mortgage lenders who see declining volumes and may view (reverse mortgages) as an opportunity to increase revenues,” said David Stevens, president of the MBA and a former commissioner of the FHA.

 

For some homeowners, reverse mortgages can fill a real need. Janie Baratta, 63, was getting hounded by bill collectors after her husband died in 2012. The former biological researcher at the University of California at Irvine had $50,000 in credit card bills she had run up during his illness, and there was still a $1,500 mortgage on her three-bedroom ranch in Irvine, California. Her $4,000 pension and social security were not enough to cover her expenses.

 

Then in 2012, she got a $300,000 reverse mortgage from High Tech Lending. Today, her credit cards are paid off. So is her regular home loan.

 

Reverse mortgages also discourage elderly homeowners from undertaking repairs and maintenance that someone else might do more proactively, said Mark Calabria, a former staff member of the Senate Banking Committee. That can hurt the value of the property, which in turn cuts into the proceeds that lenders will receive when it comes time to sell the home, leaving the FHA potentially on the hook because of its guarantee.

Still confused? Don’t worry, former U.S. Senator Fred Thomson is here to clear things up for ya.

Nice touch with the goatee, Fred. Really makes you seemed connected with the average man on the street.

Pay close attention to this trend. I expect it to become increasingly covered in the mainstream media.

What a joke.

 

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Wed, 04/02/2014 - 23:19 | 4619937 Kirk2NCC1701
Kirk2NCC1701's picture

Yeah, well, sliding down the employment stairs, plus the runaway costs of Sick-care will do that to you. Not to mention Elder Care.

Thu, 04/03/2014 - 05:40 | 4620383 negative rates
negative rates's picture

All kind of tools, for all kinds o fools.

Thu, 04/03/2014 - 06:59 | 4620457 flacon
flacon's picture

What will become of the younger generation once the older generation spends all their capital and even spends the debt? Will we will be living in tents in the countryside while suburbia lies vacant and abandoned - owned by the banks?

Thu, 04/03/2014 - 07:25 | 4620493 negative rates
negative rates's picture

No, it's your money or your life with a timer on it. You don't want to get to $18 trillion in public debt, you can't want it, the consequences are fatal trust me. 

Thu, 04/03/2014 - 13:43 | 4621746 Singelguy
Singelguy's picture

Don't worry. Before that happens, the debt will be so large that government will not be able to pay the interest even after raising taxes to 70%. They will speed up the printing presses and we get hyperinflation. Then the dollar crashes, defaults on the debt multiplies until it crashes and the debt has to be written off, either voluntarily or looking down the barrel of a gun. If it happens soon enough the younger generation might be lucky and start with a clean slate.

Thu, 04/03/2014 - 08:05 | 4620582 caShOnlY
caShOnlY's picture

The boomers really made out as they not only had cheap education and then good jobs but were also left inheritances that they spent.  This generation without a doubt is like a locust.

Thu, 04/03/2014 - 10:03 | 4620971 Pooper Popper
Pooper Popper's picture

boomers suck ASS!

They have destroyed this country,with their stupidity and GREED.

They have left nothing for their children but DEBT.

 

Selfish Bastards!

Thu, 04/03/2014 - 10:09 | 4620992 Squiddly Diddly
Squiddly Diddly's picture

How about some cheese to go with that whine.  Jealousy degenerating into inter-generational hostility is stupid.  OK, you missed the historical sweet spot, your generation has it's  advantages too.  There is more to life than  "cheap education and then good jobs but were also left inheritances that they spent".  I agree we "boomers" are not acquitting ourselves well on the field of morality for future generations.  I have a difficult time trying to convince members of my generation (who are to be blamed for being clueless by now) that Kennedy and 911 were part of the elite long term Fabian socialist undermining of the country by the financial industry.  Now that I have a hazy idea of what the agenda is (globalism) younger generations don't seem all that able to grasp it either or don't care when I explain my understanding.  As conspiracy theories increasingly morph into historical fact it becomes trendy to wear a tinfoil hat, wasn't so a while back Bircher's  were generally ridiculed.   In history empires rise and fall which is highly correlated with morality or lack thereof  (fiat money).  The inter generational moral capital has been spent. You are living in the normal historical vicissitudes of life, so get one as humble as it may seem.

MT 6:

31Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. 33But seek first the kingdom of God and his righteousness, and all these things will be added to you.

34“Therefore do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble.

Thu, 04/03/2014 - 06:12 | 4620408 BandGap
BandGap's picture

My ex-wife has the house and a home equity line of credit. She can take out 80% of the equity and just pay interest. She has burned through 50K in three years, and she is employed. The loan was taken out many years ago, who knows the worth, who knows what the 80% means. There are so many "deals" like this out there it would make your head explode. But they all result in selling your dreams down the river in the end. Cue sunset........

Thu, 04/03/2014 - 07:23 | 4620490 boogerbently
boogerbently's picture

Sub prime lending was a "deal".

Thu, 04/03/2014 - 07:27 | 4620495 negative rates
negative rates's picture

A good wife makes a good husband.

Thu, 04/03/2014 - 10:14 | 4621011 yogibear
yogibear's picture

It's not an income problem, it's a spending problem for many. 

Thu, 04/03/2014 - 11:14 | 4621226 natty light
natty light's picture

Patrick Ewing: "We make a lot of money, but we spend a lot of money."

Thu, 04/03/2014 - 08:56 | 4620738 Offthebeach
Offthebeach's picture

Once again the rich get richer, sort of. Even though I had made massive Obama recovery investments on my van down by the river, including new rubber roof, upgrading rotting, sinking tires to concrete block foundation and new astroturf exterior carpet, and more, I couldn't get a reverse on the humble Thoreauvian abode.( Granted land ownership is a bit opaque. ).

Well, it's not the end of the world. Roadside canning has improved with the snow melt. The Misses still has her part time Dollar General job. Its nice to be part of a growing retail trend. Lately all her pay was going to our Obamacare non-care premiums but the local BBS newsletter informed us of how to sell our coverage to Dr. Hamad's office for "visits" we dont even have to go to, plus us early adopters, we get a Oxy script which will fund our winter bus vaykay to the Gulf, and the office covers the deduct. There's also a recruitment incentive program (1099) of which I'm looking into.

Thanks Obama!

Thu, 04/03/2014 - 10:31 | 4621057 Georgia_Boy
Georgia_Boy's picture

No worries, it gets better you know. He's just waiting for this mess to get big enough for NPR and the NYTimes to get the sheep all outraged, then come out with a MyReverseMortgage government program. Because we ALL deserve a secure retirement!

Wed, 04/02/2014 - 23:24 | 4619951 TahoeBilly2012
TahoeBilly2012's picture

Taxpayers are at risk? Hell they are the walking dead!

Wed, 04/02/2014 - 23:48 | 4620016 Greenskeeper_Carl
Greenskeeper_Carl's picture

Gotta love how this one is going to play out. Grandma owns a house 'worth' 300k, and owns it free and clear, no mortgage. Takes out a 250k reverse mortgage. Uses the money to pay her bills, go on cruises, etc, burns through most of it, passes away. Meanwhile, housing takes its next inevitable decline, and now this house is worth only 150k. The bank gets it, leaving nothing for her family( not what I would do, but it was her property to do with as she pleased). The bank owns the house, but can now get 100k less out of it that this reverse mortgage. So who ends up eating that 100k shit sandwich? The American taxpayer. Same as always.

Thu, 04/03/2014 - 00:04 | 4620046 ghostfaceinvestah
ghostfaceinvestah's picture

Yup, as I said below, this product only exists thanks to the FHA.  Private reverse mortgage are almost entirely extinct, and when they did exist, were offered at much more stringent terms (less ability to suck equity out of the house).

Only the government has the wisdom to to evaluate and retain this type of risk.  /sarc

Thu, 04/03/2014 - 03:55 | 4620314 A Nanny Moose
A Nanny Moose's picture

REMO's....just another fucking government program.

Thu, 04/03/2014 - 05:47 | 4620386 samcontrol
samcontrol's picture

actually , if I was grandma. in the Us of A i would do the same thing.

if I "knew" my house was going down a hundred k and my kids and grandchildren lived as far from me as possible , fuck yea I would be on cruises sucking some old timer off.

Thu, 04/03/2014 - 06:52 | 4620446 ParkAveFlasher
ParkAveFlasher's picture

It is precisely this kind of desperation that The Me Generation finds itself in.

Thu, 04/03/2014 - 07:30 | 4620510 negative rates
negative rates's picture

You know there is a probability you won't come back from one of those cruises, don't you know?

Thu, 04/03/2014 - 08:01 | 4620572 Doubleguns
Doubleguns's picture

The me generation is leaving behind trillions in debt. Nothing else. When will the youngters wake up and canx the social security, medicare and medicaid to pay the trillions in debt.

Thu, 04/03/2014 - 08:52 | 4620721 Greenskeeper_Carl
Greenskeeper_Carl's picture

If us youngsters ever do that, it won't be canx-ing SS, Medicare, etc to pay those trillions of dollars in debt, that will be canx-ed as well. If there is ever a sufficient awakening by my generation to realize what was done to us by past generations, we will say that these debts amounted to taxation without representation, and therefore it is invalid. These programs will be gone by the time we are old enough for them, which means my generation is expected to pay for all these entitlements out of our paychecks, then be left with nothing but an insolvent govt when we retire.

Thu, 04/03/2014 - 10:36 | 4621076 detached.amusement
detached.amusement's picture

yep, that's pretty much my bet...if I want to "retire" I know I am going to have to move into the back woods and live off the land.

Thu, 04/03/2014 - 00:15 | 4620064 Anusocracy
Anusocracy's picture

The only reason the US economy is still afloat is because of all the gases created by its decomposing body.

Thu, 04/03/2014 - 00:50 | 4620105 daveO
daveO's picture

Just one last FU from the ME Generation. Banks and Corp's will end up owning all the housing.

Thu, 04/03/2014 - 02:25 | 4620231 OldPhart
OldPhart's picture

I'm one of the last boomers, actually Generation Jones, born in 1959.

I fit all the definitions of someone that has little assets.  My savings are less than $60k.  And I don't dare risk saving anything until our government, banks and markets are cleansed.  I've accelerated payments on my mortgage and will throw a party about five years from now when I pay off my 1998 7.5% mortgage.

I know I will be working until I die.  I will not be able to retire at 67 (yes, that's my retirement age for those of my tier). 

My plan is to die with what little honor I have left and save you youngsters the unjust costs associated with me as much as possible.  My vision, since the 80's, has been finalized as a dried up corpse on the side of a desert road.

I'm pretty sure that's how I will eventually wind up...and it won't be self inflicted, it will be due to starvation, some sort of germ warfare, nuclear blackout, or simple neglect by everyone. 

Thu, 04/03/2014 - 02:43 | 4620256 Skateboarder
Skateboarder's picture

Beans and rice, OldPhart. Beans, rice, water, an MSR featherlite, and a shitton of white gas. ;-)

Don't worry about the money and shit. As long as you got your brain intact. Where we're going, money's gonna be the least of our concerns.

Thu, 04/03/2014 - 02:44 | 4620259 Son of Loki
Son of Loki's picture

smells fishy, these reverse mortgages.....

Thu, 04/03/2014 - 03:45 | 4620306 Hobbleknee
Hobbleknee's picture

What?  You mean you will pass your house on to your kids instead of the bank?

Thu, 04/03/2014 - 04:37 | 4620345 OldPhart
OldPhart's picture

My older son is a highly successful contractor after 12 years as a DOD contractor in Afghanistan.

He doesn't need a dime from me.

My younger son is a Bi/Gay whateverthefuckyoucall them coffee pourers at Starbucks (and the only time I drink a sip of a cup of Starbucks is when my bi/gay son gives me a free cup that shit)...guess who gets the house.

Son in Afghanistan for last twelve years...barely made it out of high school....built all of that county's communication infrastructure after we decided to destroy it.

Younger son...bi/gay...Eagle Scout, earned it the hard way, with hard core scouter parents busting his ass.  I"m thinking that once he figures his personal shit out...we're going to be in relatively better circumstances.

(not that either actually approves of us.)

Thu, 04/03/2014 - 07:42 | 4620540 duo
duo's picture

GI Joe to Pajama Boy in two generations

Thu, 04/03/2014 - 04:03 | 4620322 A Nanny Moose
A Nanny Moose's picture

For those about to rock...we salute you.

Thu, 04/03/2014 - 04:23 | 4620333 OldPhart
OldPhart's picture

nods

My generation had hero grandparents...

I can't let them down.

Thu, 04/03/2014 - 10:40 | 4621096 detached.amusement
detached.amusement's picture

ditto...and my mom says she aint ever going to the doc, if she goes dementia crazy she'll take herself out back & shoot herself before making us kids take care of her. 

Thu, 04/03/2014 - 11:06 | 4621197 MachoMan
MachoMan's picture

She would shoot herself, but she keeps forgetting...

Thu, 04/03/2014 - 11:57 | 4621384 waterhorse
waterhorse's picture

Then let her go for a nice walk in the woods.  That's what I will be doing (if my family remembers).

Thu, 04/03/2014 - 12:28 | 4621464 Almost Solvent
Almost Solvent's picture

Look at the flowers!

 

LOOK!!!

Thu, 04/03/2014 - 06:16 | 4620412 BandGap
BandGap's picture

Same here, born in 1961. Like you have paid into this sytem all my life and will have little to show. Have some property and savings worth a bit more thasn 100K. Party on Garth.

I don't plan on dying, just running until the engine gives out. Wish I could pull off that Monte Python scene where the old guy is chased by topless women on roller skates over the cliff. That's about the only life goal I have left. 

Thu, 04/03/2014 - 06:18 | 4620415 JR
JR's picture

My plan is to die with what little honor I have left and save you youngsters the unjust costs associated with me as much as possible.

Hang in there, OP, the sleeping giant, America's middle class, is beginning to stir to face the ultimate battle, the people versus the banks. Without a legacy of individual value and human dignity, there can be no civilized life for America's youngsters to inherit. Any "unjust costs" left by baby boomers are miniscule.

This continuing loss of liberty and growing tyranny, paid for by taking money from the taxpayers until even their very homes are wrenched from their estates and given to the international bankers, is planned. It was planned to wipe out America’s strength, i.e., her middle class and the inheritance it hoped to leave posterity.

A newsletter I received around 2001 from Aetna, at the time my 401k plan provider, contained a small news item that Fed Chair Alan Greenspan was concerned over the large inheritances that  boomers would receive from their parents.  Well, I believe he and Bernanke and Congress have taken care of that worry as both baby boomers and their parents deliberately are being forced to eat the seed corn of their estates --  their homes to reverse mortgages and  the value of their social security and pensions to double-digit inflation.

Why would Congress at the behest of the international bankers do this? The reason is to decimate the ethical past and moral compass of America’s middle class and its financial strength to oppose and resist world socialism, i.e., world hegemony.

It’s all in the Obama-Goldman Sachs-Robert Rubin road map for social security “reform” to increase the retirement age while cutting back and devaluing benefits.

Already, as Fox News reports, except for low-income workers people retiring today are part of the first generation of workers who have paid more into Social Security taxes during their careers than they will receive in benefits after they retire.

In fact, most high-income workers started getting less in benefits than they paid in taxes in the 1990s, according to data from the Social Security Administration. 

The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating. -Thomas Jefferson

Something is very wrong.

Thu, 04/03/2014 - 07:42 | 4620541 plane jain
plane jain's picture

Sucking the marrow from the bones.

I like the idea of granny blowing it all on cruises and slots.  Looks like just another way to scrape the barrel clean, bank gets the property, taxpayers get any debt left over.

IME a reverse mortgage is more about desperation than partying on.  I'm sure plenty of boomers are in the same situation as our parents.  

My mom had saved and took a big hit in the market at the same time she was laid off her job.  Unable to get another good one at her age, though she has had a couple pocket change part time gigs.  Now can't even find that and she is desperate, trying to survive on SS and pension of $14K a year.  Type 2 diabetic and has had to go without meds the last few months of the year once she hits the donut hole.  

My in laws were small business owners.  Sold out in 2003 IIRC.  Went big into a stock that has now gone to zero.  Invested in a natural gas deal that I suspect was a scam.  Not quite wiped out, but close, and IIRC they get $1400 a month or so.

Thu, 04/03/2014 - 09:50 | 4620925 Tom_333
Tom_333's picture

Big inheritances are a problem...?

You know there´s a problem when you read something like that. I would say we are staring a very malveolant problem right in the face. What was the official reasoning around this "problem".

Problem - my ass. There´s more real money around to further invest and put to good use and avoid living off the tax dollar. Problem? This is insane.

Thu, 04/03/2014 - 06:55 | 4620452 ParkAveFlasher
ParkAveFlasher's picture

Generation Dessikation, bitchez!

Thu, 04/03/2014 - 07:33 | 4620503 dogbreath
dogbreath's picture

Fumatious Shitutious

Why haven't you rewritten your mortgage at a lower rate.  Or are you locked in.

Let raise a glass to death.  Regards

 

Thu, 04/03/2014 - 08:54 | 4620726 DadzMad
DadzMad's picture

My dad just retired at the first of the year.  He did pretty well.  Skilled machinist, lived frugily, he's got plenty to get by.  Called him last week to see what he's been up to and he just put in a 50 hour work week.  He said reitrement wasn't all it's cracked up to be, he was bored in less than three months and driving my step mom crazy, so he went back to work part time for cash at a friends machine shop.  We talked about how this retirement idea is a relatively new phenomenon, generationally speaking.  All of his grandparents died on the farm and were happy up till the end while his parents rotted away in front of the TV watching Wheel of Fortune and the ballgame.  He said what he does like is he can take off anytime he wants to go fishing.  Walleye's are starting to run..... 

Thu, 04/03/2014 - 10:42 | 4621102 detached.amusement
detached.amusement's picture

I remember being able to catch Walleyes back in the day in Lake Champlain before it became polluted as all hell.  Good eatin', those.

Thu, 04/03/2014 - 10:26 | 4621047 post turtle saver
post turtle saver's picture

lemme get this straight... you have a 1998 7.5% mortgage (which I assume must have been a 30 year given the time frame and rate), and you didn't take advantage of refi to a 15 year at 3 some percent? even when you had money in the bank to do it???

do you have any idea how much money you would have saved over the course of the loan if you'd done that???

*facepalm*

when are people going to grow up and stop acting like life doesn't require math? Jesus H. Christ on a toothpick...

Thu, 04/03/2014 - 13:26 | 4621665 OldPhart
OldPhart's picture

You are correct and the critiscm is warranted.  At the time of opportunity, the offers of re-fi wanted me to borrow a minimum of $25k more than what my mortgage balance was.  I refused to go further in debt, even though the rate was shown as lower.

I didn't trust the paper that the offers came on.  I didn't go further into debt and I didn't want to find that my interest magically changed into a variable rate.  I have no trust for bank contracts.  Never have, never will.

Fri, 04/04/2014 - 00:38 | 4623922 post turtle saver
post turtle saver's picture

understood... not everyone has access to a credit union... and the tactic you note is how they basically keep you from saving yourself money with the refi... most people were looking at those deals and saying "ooo free extra $25k at a lower rate" or equally bad logic, not realizing that missed the whole point of doing the refi...

sorry if I came off too harshly... I wish you well

Thu, 04/03/2014 - 13:53 | 4621794 Zoomorph
Zoomorph's picture

Life requires a lot of skills and nobody ever has all of them. There simply isn't enough time to know everything in this infinitely complex world. I'm sure we're all missing out on opportunities all around us.

Wed, 04/02/2014 - 23:24 | 4619952 BringingTheRukus
BringingTheRukus's picture

Paging Dr. Kavorkian. Stat.

Wed, 04/02/2014 - 23:27 | 4619955 ebworthen
ebworthen's picture

Pretty sure my Mom did this last Fall so she could keep her standard of living and keep "helping out" some of her adult children (dirty little secret my Sister helped her arrange).

Not to mention the Fred Thompson/Henry Winkler/Robert Wagner non-stop commercials pushing this crap.

Tapeworms in a dying person, maggots on a corpse.

Parasites seem to be all that is left.

Wed, 04/02/2014 - 23:34 | 4619980 nickels
nickels's picture

Make sure your kids get nothing. They never call anyway.

Thu, 04/03/2014 - 06:37 | 4620430 buzzsaw99
buzzsaw99's picture

I never call, because I ain't getting shit. ;)

Thu, 04/03/2014 - 07:12 | 4620476 ParkAveFlasher
ParkAveFlasher's picture

Mantits Support Group is in session.

It's gonna be one hell of an Easter biting my tongue.  I have two brothers on the blue pill, the lawyer is pushing my father to reverse mortgage to put a down payment on a vacation home in flea bitten Florida ("but it's a national park!") at the behest of his sister-in-law the real estate agent while the former UBS trader is trying to reclaim his father's patronage by memorizing Fox News platforms and reading Hannity books.  What a country!  What a shitshow we've become!  I can't even open my mouth, every comment is an unholy heresy.  

Thu, 04/03/2014 - 07:41 | 4620537 dogbreath
dogbreath's picture

My parents are selfish cunts, they are 79 and 83.  There is no fami;y, no estate.   My toxic oldest sister has pushed me and my other sister under the bus at every opportunity, she'll manuver to get it  all, she is a cunt too

Thu, 04/03/2014 - 07:57 | 4620564 Ace Ventura
Ace Ventura's picture

Hear, hear! (Or is it here here?) It's gotten to the point where I don't say much to anyone at family gatherings, because the moment I try and shed some red-pill truth on a given subject.....the groans and eye rolls start. One of my favorite lines of 'reasoning':

'You can't always assume the government is up to no good, all the time!'

Yeah, you're right mom/cousin/sister/brother/aunt/uncle so-and-so......I keep forgetting that part about how the gubbermint is here to help us. Sorry about that! Any more pudding left? When does 'The Bachelor' come on?

Barf.

Thu, 04/03/2014 - 08:56 | 4620736 tarsubil
tarsubil's picture

Reminds me of the other day when the Republican party called to get some money from me. I was pretty much, "You want to do this? Let's do this." The lady just hung up on me when I started talking about the 4th amendment. Will someone just push 'flush'?

Wed, 04/02/2014 - 23:36 | 4619987 Shad_ow
Shad_ow's picture

Parasitic sisters are a scourge.   I have one too.  Shame on them.

Do all old people suddenly become so gullible they can't think for themselves?

Wed, 04/02/2014 - 23:52 | 4620025 Greenskeeper_Carl
Greenskeeper_Carl's picture

Unfortunately yes, they do sometimes become that gullible. I have been told that before she passed, my great grandmother tried to give most of the rest of her money away to one of those shyster parasite preachers (kinda redundant, i know)you sometimes see on TV that prey on people like her. Money that she still needed to pay her bills, but wanted to give it to Jesus. I really hope I don't end up like that, but who knows.

Thu, 04/03/2014 - 00:53 | 4620111 daveO
daveO's picture

Still better than bankers or brokers.

Thu, 04/03/2014 - 01:56 | 4620198 813kml
813kml's picture

That's why I plan to roll my investments into hookers and blow at age 65.  The longevity issue will work itself out.

Thu, 04/03/2014 - 02:27 | 4620236 OldPhart
OldPhart's picture

I'll roll my fictions into viagra and hookers.  You do your drugs, mine have a purpose.

Thu, 04/03/2014 - 05:49 | 4620388 negative rates
negative rates's picture

Yee aint tryin to aquire a pencil neck, er ya?

Thu, 04/03/2014 - 06:58 | 4620455 Wahooo
Wahooo's picture

Old man drug dealer, it could be worse I guess.

Thu, 04/03/2014 - 05:48 | 4620385 negative rates
negative rates's picture

Plus recepters in the brain get fried from the need to feel good, thus taking longer to make decisions which most likely were the wrong trained ones anyway, but when realization occurs, the denial factor out weighs that and we are back to square one.

Thu, 04/03/2014 - 07:44 | 4620548 duo
duo's picture

Just as bad, giving all your money to QVC for a house full of cheap crap.  Nothing makes a lonely old person feel better than a box arriving every day.

That Southpark episode has it figured out.

Thu, 04/03/2014 - 04:07 | 4620325 A Nanny Moose
A Nanny Moose's picture

CRS/Alzheimers. This is my theory as to why $11 million in gold coins were recently discovered in CA Gold Country.

Wed, 04/02/2014 - 23:25 | 4619958 Seasmoke
Seasmoke's picture

Time to roll out the Thomas Jefferson quote again.....

Thu, 04/03/2014 - 00:13 | 4620058 Dr. Engali
Dr. Engali's picture

Problem is, it's not a real Jefferson quote.

Thu, 04/03/2014 - 04:08 | 4620326 A Nanny Moose
A Nanny Moose's picture

which? Evidence? /Giggle

Thu, 04/03/2014 - 05:50 | 4620391 negative rates
negative rates's picture

I'm still wondering if he's gonna be on that cruise.

Wed, 04/02/2014 - 23:26 | 4619960 WageSlave
WageSlave's picture

Boomageddon

Wed, 04/02/2014 - 23:26 | 4619961 ghostfaceinvestah
ghostfaceinvestah's picture

Mike is right, these loans wouldn't even exist if the FHA wasn't taking the risk.  No private entity would be willing to take the risk the FHA is taking.

Even the TBTF banks have realized how parasitic these loans are and bailed on the product.  Now only the true pond scum of the mortgage industry are originating these mortgages for the government.

It's a real travesty the FHA hasn't shut down these toxic products.

Wed, 04/02/2014 - 23:29 | 4619968 Caviar Emptor
Caviar Emptor's picture

The overlords will soon own everything as boomers and others mortgage away whatever they still own.

Family silverware? Granny's rainy day fund?

Don't think for a moment that debt will be discharged upon death: they'll come after the heirs.

Wed, 04/02/2014 - 23:41 | 4619975 RaceToTheBottom
RaceToTheBottom's picture

Maybe a sign of the top and an upcoming crash in the real estate market. 

 

Ohhhh, except that real estate crashes have been outlawed.

Wed, 04/02/2014 - 23:41 | 4620000 Caviar Emptor
Caviar Emptor's picture

Nope. If that is allowed to happen then Marshall law is declared as the global financial system melts down and freeze completely.
Real estate will gradually be held by fewer and fewer powerful land barrons, warlords, and grand duchies so prices will never fall. The land will be rented back to you that ye may be allowed to live. O the glory of the new feudalism

Thu, 04/03/2014 - 09:30 | 4620840 Almost Solvent
Almost Solvent's picture

My thoughts over the last decade (based on my wonderful BA in History :) center on what we are living through is the re-combination of the State and Corporations - i.e. "the Crown" is reunifying state and corporate power long after Queen Elizabeth spat out the first one around 1600, the "Honourable East India Company".

 

Anywho, the corporate spawn is now devouring the state so that what once was one, shall be again, forever and ever, amen.

 

 

Thu, 04/03/2014 - 10:36 | 4621075 Overfed
Overfed's picture

It's martial law, dammit.

Wed, 04/02/2014 - 23:42 | 4619994 TN Jed
TN Jed's picture

Right said Fred...  https://www.youtube.com/watch?v=U_rO08yz9cs

"Isn't that right Jesse?"

-barf

 

edit: sonofabitch.  that'll learn me to post before even bothering to look for the same video posted.  Well, different commercial but same gag reflex.

Wed, 04/02/2014 - 23:41 | 4619997 Godisanhftbot
Godisanhftbot's picture

 shite, they are buying bitcoins with the money, cant you see how bitcon is ripping higher!

Wed, 04/02/2014 - 23:43 | 4620006 kurt
kurt's picture

You've got filet mignon, various steaks, roasts etc. till you get to ribs. Reverse mortgages are the ribs. A lesser cut of meat with somewhat more work to obtain the meat.

The vermin in the reverse mortgage business are bottom dwellers, scum.

Can't you see the implosion?

Were are the real men? How far down do we have to go?

Stop feeding on the elderly, you ugly freaks.

Thu, 04/03/2014 - 09:31 | 4620865 BooMushroom
BooMushroom's picture

You ain't seen nothin' yet, baby! Just wait until we get back to turkey necks, beef tongue and tripe.

Thu, 04/03/2014 - 14:55 | 4622116 Offthebeach
Offthebeach's picture

Even aftet they have taxed, financed, taken everything, there will still be, when you get off the cattle bus at the fresh air FEMA retirement camp, the pile of eyeglasses, luggage, and later hair, dentures and fat to be harvested.

This stste, this monster has your liberty, your property, your license to work or travel, your health, you savings to tax ir strip......
.....it's pretty late.

Wed, 04/02/2014 - 23:46 | 4620010 Caviar Emptor
Caviar Emptor's picture

Fred Thompson ran for president...because he WAS the president on TV. So he looked and seemed presidential.
That's my kind of US Prez!

Thu, 04/03/2014 - 10:11 | 4620999 DeadFinks
DeadFinks's picture

It's all made for TV.  Instead of Fred, we opted for the reality show, "Pimp My Whitehouse" with the current admin.

Wed, 04/02/2014 - 23:54 | 4620013 Bunga Bunga
Bunga Bunga's picture

I thought housing is a good investment. No PhDs from the parents basements the boomers can sell to?

And, I wonder what will the banks do with all the homes when the owners passed away?

Thu, 04/03/2014 - 00:55 | 4620117 daveO
daveO's picture

Rent to serfs.

Thu, 04/03/2014 - 08:22 | 4620614 Chaos_Theory
Chaos_Theory's picture

Sold/converted to MicroPrisonsUSA LLC.

Thu, 04/03/2014 - 13:18 | 4621631 Singelguy
Singelguy's picture

Home ownership is a myth that the masses bought into. Think about it for a moment. You buy a house and pay cash for it. What is the return on your investment? When you add up the cost of insurance, property taxes, and maintenance, I suspect the annual return is negative. If you are lucky or can time the market , or you own the house for enough years, you might make a nominal profit. However, when you net out all the annual costs of home ownership against your profit, I think you are lucky to break even. On the other hand, if you rent a comparable property and invest the cash with even a 5% annual return, I suspect that you will be much better off in the long run. The exception is when you buy a house and rent it out and have the tenants pay off the mortgage.

Wed, 04/02/2014 - 23:49 | 4620017 Soul Glow
Soul Glow's picture

Sell what you just spent 30 years to buy back to the bank that always had the deed in the first place!  So don't worry!  You've always been fucked!

Thu, 04/03/2014 - 00:56 | 4620118 daveO
daveO's picture

So, you don't agree with Debt Slavery? That's jist UnAmerkan.

Wed, 04/02/2014 - 23:50 | 4620020 Uber Vandal
Uber Vandal's picture

Would Boomers be scrambling for cash if CD's were paying 5% or even 3%?

If one had 1 million USD saved in cash, at 5%, that is $50,000 in interest. At 1%, that would barely cover property taxes in some areas. All taxable, most likely.

Everyone seems to point the finger at those who did not save, or save enough.

JFC, is it even possible TO SAVE ENOUGH anymore?

Much like this fluff piece here: http://finance.yahoo.com/news/want-retire-million-dollars-heres-19552156...

"With a 6% return, you too can retire with a million dollars"

Just what will that buy when you get there, though?????

How many boomers got hit in the dot com bust, the 2008 bust?

Even if they made great progress riding the escalator up in the recent market upturns, it still takes 100% returns to break even from 50% losses.

 

Thu, 04/03/2014 - 01:01 | 4620128 daveO
daveO's picture

Boomers do not save anything, judging by my relative 'Boomers'. One was begging money off his 80 yr old dad. The others have blown their money on new(leased and bought) cars, second homes, move up homes that they didn't need, and, my favorite, Time Shares! Who needs savings when you can buy a Time Share in Cancun, where Gringos can't even legally own property?

Thu, 04/03/2014 - 01:24 | 4620022 SgtShaftoe
SgtShaftoe's picture

Smells like v2.0 of student loans to me.  There's an army of event's flailing with lit flares running around in the dynamite factory now; who know's where it's going to eventually go boom first.  Shit is going to get real eventually.  That is certain.

Thu, 04/03/2014 - 02:28 | 4620239 sessinpo
sessinpo's picture

SgtShaftoe    Smells like v2.0 of student loans to me. 

---

You can't go bankrupt on student loans. Plus in a reverse mortgage, the house is collateral.

Thu, 04/03/2014 - 13:11 | 4621598 Singelguy
Singelguy's picture

As long as the collateral is worth something. At current valuations it might make sense to take out a reverse mortgage and use the proceeds to buy gold. Then if (when) the market crashes again, or the dollar implodes, give the keys to the bank and walk away.

Wed, 04/02/2014 - 23:51 | 4620023 justsayin2u
justsayin2u's picture

So if property values increase can they re-fi and take more out of the house?  And if property values decrease they have no downside risk.  Not bad.

Wed, 04/02/2014 - 23:57 | 4620031 Bunga Bunga
Bunga Bunga's picture

I wonder what will happen when the banks have paid out 1 million but the house is worth 500k only.

Thu, 04/03/2014 - 01:02 | 4620131 daveO
daveO's picture

Bailout.

Wed, 04/02/2014 - 23:58 | 4620035 StupidEarthlings
StupidEarthlings's picture

O..boy...

Here we go..

I used to think that I got some cool website. .with top stories before they happened. ..

 

And its kinda tru..problem is.. if it is real news,  nobody gives a.rip anyway. 

 

And if it was news..the story gets fixed before mainstream piccks it up.

 

 

So..while 3 month ago. .I used to get excited. .im startin to thnk that zero is just another paid for site. .just to keep us occupied. 

There is no news..there is nobl help comin.

 

Keep readin n posting. 

Thu, 04/03/2014 - 00:43 | 4620095 SgtShaftoe
SgtShaftoe's picture

lang uage  or logic i.s  Not ur str ong suit. is. it???

 

Thu, 04/03/2014 - 08:36 | 4620528 messymerry
messymerry's picture

Don't be so quick to judge harshly you guys.  11% of stupidearthlings are taking antidepressents.  Surely some of that must leak into forums such as this.  Let's try to cheer this guy up.  Say something funny like:  Obama keeps a sceptre close by in the throne room...  ;-D

https://en.wikipedia.org/wiki/Sceptre

 

Post posting edit:  I went to Wikipedia and read the article on Throne Rooms and of all the great rooms listed, there was not a single mention of the White Porcelain Throne anywhere...

https://en.wikipedia.org/wiki/Throne_room

Thu, 04/03/2014 - 00:05 | 4620047 seek
seek's picture

I've lost count of how many times I've said it, but I'll say it again:

The future of the US is starving, homeless, old people that work until they die, because they were both sold out and bought into the lie of an expensive lifestyle funded by money they should have saved for retirement.

Seriously, people are cash-out financing homes in their 50s and 60s? WTF! Stupid, stupid, stupid.

Thu, 04/03/2014 - 01:05 | 4620135 daveO
daveO's picture

It's called the ME Generation. Modern-day serfs who think they're God's gift to humanity. Completely brainwashed by TV. If the Fonz or Fred Thompson suggests it, then it has to be good.

Thu, 04/03/2014 - 06:55 | 4620451 buzzsaw99
buzzsaw99's picture

the beauty of it is that they are too narcissistic to kill themselves. schadenfreude dead ahead!

Thu, 04/03/2014 - 10:31 | 4621055 yogibear
yogibear's picture

OVC/home shopping zombies. Have to extract every bit of credit to buy junk.

Thu, 04/03/2014 - 12:09 | 4621422 waterhorse
waterhorse's picture

I admit to being a sometime QVC shopper, but even I don't get people who buy food on 3 or 4 "easy pays" (aka evil pays).  First of all, why would you even buy food on TV?  That doesn't make sense and how good can it really be?  Crab cakes for $80 and 4 evil pays of $20 (but you get free shipping!) Why finance food for months after you've already consumed it (yes, I know people who put groceries on credit cards and don't pay it off right away are doing the same thing).  I don't understand buying the tchotchke crap either.  How many crappy capodimonte items does one need?  But I have bought my Dyson and Kitchen-Aid (they last forever and ever) on QVC.

Thu, 04/03/2014 - 12:11 | 4621423 waterhorse
waterhorse's picture

how do I delete duplicate - ugh.

Thu, 04/03/2014 - 00:10 | 4620055 QQQBall
QQQBall's picture

We are near the end of the credit cycle. Sub-prime car loans, student loans and literally using your home as an ATM. The loss of your family home is not included in Bernanrke's misery index. Bernanke and Greasepan will burn in hell.

Thu, 04/03/2014 - 00:13 | 4620057 QQQBall
QQQBall's picture

Wait! A $1,500 mortgage and she rolls up debt to pay off unseceured CC debt? Who exactly was advising her? $1,500 mortgage is like one month's CC payment on a $50,000 balance.... Gonna have to start sleeping with one eye open.

Thu, 04/03/2014 - 01:53 | 4620195 object_orient
object_orient's picture

Yeah it sounded fishy. She has a 4k/mo pension!!! AND social security and only 50k in CC debt but can't make ends meet? Methinks she lives the high life or the numbers are wrong. Chapter 13 would have served her better.

Thu, 04/03/2014 - 02:35 | 4620245 OldPhart
OldPhart's picture

Fuck all that.  Credit Card debt is unsecured debt.  Ignore the credit score if you're old.  Walk from it.

Thu, 04/03/2014 - 07:30 | 4620511 spinone
spinone's picture

They'll garnish your SS or put a judgement on your house if you dont file Bkrptcy

Thu, 04/03/2014 - 00:20 | 4620070 benb
benb's picture

You can just see the already hollowed out middle class still going through the motions as it melts away.

Thu, 04/03/2014 - 00:35 | 4620087 Skateboarder
Skateboarder's picture

Yes, going through the motions - it's an important part of maintaining the semblance of a system that still operates.

It's like you're constantly making pancakes, and the batter keeps getting thinner and thinner. Pretty soon, no more pancakes.

Thu, 04/03/2014 - 00:36 | 4620089 Incubus
Incubus's picture

It's almost time for Mad Max.

 

 

Thu, 04/03/2014 - 01:09 | 4620141 daveO
daveO's picture

Well, if the middle class was built on debt, which it has been for over 40 years, then it never stood much of a chance anyway.

Thu, 04/03/2014 - 00:35 | 4620088 U4 eee aaa
U4 eee aaa's picture

The suicideTsunami is on its way. The earthquake has already happened. It is only a matter of time before the lemmings start jumping from the cliffs in lock step with their bankers

Thu, 04/03/2014 - 00:57 | 4620109 franciscopendergrass
franciscopendergrass's picture

The reverse mortgage, the pay day loan for the elderly

Thu, 04/03/2014 - 02:01 | 4620202 813kml
813kml's picture

But the Fonz said a reverse mortgage would make me cool.

Sit on it Potsie, indeed!!!

Thu, 04/03/2014 - 01:11 | 4620147 idontcare
idontcare's picture

Quick kids, get mom and dad declared incompetent, get appointed as their guardian, take control of their assets, then put them both in cheap retirement homes before they get approved for a reverse mortgage otherwise all your dreams of living off mom's and dad's $ during your later years will evaporate with the stroke of a pen.

Thu, 04/03/2014 - 05:31 | 4620378 22winmag
22winmag's picture

You sir, are a [domestic] financial terrorist of the highest order.

Thu, 04/03/2014 - 02:41 | 4620254 Son of Loki
Son of Loki's picture

the financial guy on the radio said reverse mortgages are to be avoided at all costs.....

Thu, 04/03/2014 - 05:27 | 4620376 22winmag
22winmag's picture

The FCC will put an end to that soon.

 

I thought only National Association of Realtor pimps and cheerleaders were allowed on the air.

Thu, 04/03/2014 - 09:45 | 4620914 Toronto Kid
Toronto Kid's picture

I chewed my mother's ear off about the evil that is reverse mortgages. I told her it was a fancy way for bankers to eat at the remaining half of the value of the house by way of interest. I told her it was the old money for nothing scam. I told her if she ever had to git out of the house for whatever reason she'd see nothing coming back to her.

Why would I leave my house? she wanted to know. That's when I threatened to move to Edmonton and take the other two siblings with me (the siblings and I git along well) if I ever even heard about a reverse mortgage from her OR her friends.

You want your parents to avoid a reverse mortgage - threaten to move everyone to Edmonton.

Thu, 04/03/2014 - 03:06 | 4620279 kellycriterion
kellycriterion's picture

Could it be time to stop going over and over what are really manifestations of the same phenomenon?

All income producing assets are pledged, committed, mortgaged, many times over. The OPM mafias have the senior claims on everything.

Private ownership has become an illusion. There are no hard limits on taxing, on borrowing(which is really more taxing), money printing, currency manipulation, capital controls. And yes legal chain of custody must yield to reality. You can consume resources and are even allowed limited management as long as the OPM mafias get a huge cut and as long as the resources aren't needed to support their engines of corruption and consumption. Which of course have priority.

Socialized losses are locked in unless there's a space alien bail out. The only question is how costs will be realized. Death by fire or death by drowning? People in the OPM biz will play heads they win tails you lose for any stakes. They actually prefer no limit. Now you're tapped.

Thu, 04/03/2014 - 03:15 | 4620287 sceptical_economist
sceptical_economist's picture

So long as your house outlives you, you'll be fine. Honest.

Thu, 04/03/2014 - 07:12 | 4620475 El Hosel
El Hosel's picture

Don't worry The Fed is all over it,  Bullard out this morning with Temper the Taper Talk. More free money for TPTB and TBTF is just the ticket.The Federallies are barfing up Dove Feather's with every breath, pass the Fairy dust. 

Thu, 04/03/2014 - 07:04 | 4620464 YYZ
YYZ's picture

A Fonzi scheme?

Thu, 04/03/2014 - 07:30 | 4620509 RabbitChow
RabbitChow's picture

Maybe he just wants to be known as "The Ponz".  Ayyyyyyy.....

Thu, 04/03/2014 - 09:41 | 4620492 messymerry
messymerry's picture

Fred Thompson, You ought to be ashamed of yourself.  A grown man pandering like a kid at the register isle wanting some candy.  You can take the man out of politics, butt you cannot take the politics out of the man. 

Thanks Mike and Tyler for yet another squiggle in the snakepit that is post-millenium economics...

This is just one more manifestation of the incipient global socio-economic collapse that we are witnessing.  Bear in mind that as bad as the economic collapse looks, the social collapse is really the bigger problem.  I will have more to say on this later.

;-D

Thu, 04/03/2014 - 07:29 | 4620504 RabbitChow
RabbitChow's picture

Well, now I don't feel so bad.  I've always had a feeling that Suzi Orman only talks the two percent of the population that is making money hand over fist and the only reason they are asking if they can afford it is because they know they can and are just flaunting how much they have.  I can't imagine why anyone would want a reverse mortgage.  I've never put faith in the equity of my house -- it's there but really only for the purposes of moving and buying another house at some point. 

I lost big time from 2006 through 2008 -- got out of the market a month before everything really went south, no intention of going back in until things change. 

Too bad the homeowners can't rehypothecate the property but I guess that's already been done by the banks and lenders.

Thu, 04/03/2014 - 07:37 | 4620527 insect0man
insect0man's picture

I can't imagine why anyone would want a reverse mortgage

Starving people will eat anything they can get their hands on.

Thu, 04/03/2014 - 07:50 | 4620515 insect0man
insect0man's picture

 

 

A reverse mortgage doesn't do much to fill the vacuum manufactured when the multi-generational family support structure was destroyed, does it.  Oops.

"...and because of this, God gave them over..."--Romans 1:25+

Are we there yet?

Thu, 04/03/2014 - 07:40 | 4620533 homiegot
homiegot's picture

I guess it's better than eating cat food.

Thu, 04/03/2014 - 08:58 | 4620746 messymerry
messymerry's picture

Hey, cats eat better than dogs.  Trust me, I know...

;-D

Thu, 04/03/2014 - 08:14 | 4620590 Miss Expectations
Miss Expectations's picture

So, here's how the Home Equity "Family Plan" worked in my husband's family:

The mom died quite quickly after the cancer diagnosis.  The dad was disabled (wheel chair) due to a nerve disorder, his mind was as sharp as ever.  The older brother (and his nurse wife) volunteered to take dad in.  They quickly got power of attorney and sold his house, which had been paid off years ago.  They took the money and bought their own new house, a car and a boat.  Dad, now indigent (asset stripped) goes into a nursing home.  They didn't visit him even once after they dropped him off (guilt?). 

We can keep our eyes on the Reverse Mortgages, but I suspect we're going to see some very ugly Family Plans over the coming years.

Thu, 04/03/2014 - 08:12 | 4620591 deerhunter
deerhunter's picture

I am a boomer.  2010 lost a 20 year job.  Good gig.  Sales trainer/manager over two big midwest cities.  Belly up with the meltdown and a 40 plus year familiy owned manufacturer sells factory for pennies on the dollar.  55 out on the street looking for work among many others my age.  Its ok,  the world doesn't owe me a living.  I have been astounded by the philosophies and company atmospheres of some of the people I have sold for in the past 3 years.  One commission only job I took very briefly the whole company was based on lies and lying to the customer.  Everything.  House of cards.  Chase the dollar.  A new sales managers claim to fame was writing trading platforms for the CME and CBOT that resulted in him losing 10 million dollars and that I guess qualified him to teach me how to sell in my employers eyes.  60 percent of his sales force quit after three days of listening to his rants.  If he wasn't a cokehead I don't recognize one when I see them any more.  I used to wonder why we needed to teach ethics in business college.  Our country has fallen.  Without a cleansing I don't believe it will rise back up.  Reverse mortgages.  If it can generate fees and charges the banks will sell them.  Shame on Fred Thompson and the Fonz. I cringe when I see the commercials.  to insectoman,, we are there,  reprobate minds,  unable to hold sound judgement,  look around.  We have been there a long, long time.  Florida five year old girl was told by a school employee she couldn't bow her head and have a silent prayer to bless her lunch,  really?   We are there,,,,,,,,,

Thu, 04/03/2014 - 08:12 | 4620592 Waterfallsparkles
Waterfallsparkles's picture

I have looked into these Mortgages with great debth. 

They are really, really a bad deal for the Borrower.

They charge about 2% above the normal Mortgage Rates.

They only let you take out 65% of your equity.  With a fixed rate Mortgage.  With an adjustable rate mortgage you will be eligible to take out more a year later.

The points and closing costs are extremely high and are included in the 65%.

They make you take a lump sum so you will be paying on the total of the interest on the equity and the closing costs right away.  You cannot take a monthly check.  If you do not need all of the Money there is no place you can put it for more than 1% yet you are paying them about 5.5% interest.

Your heirs only have a limited time to sell the house after you die.  I think it is 6 months and you can get an extention for a year.  But, I know with my Fathers house it took us 6 months just to clean it out, much less sell it.  What if it gets tied up in Court?  Could take a year if there was a Court case because it would have to go to the Circuit Court because of the value.  Those Courts move slowly.  Which means you would be subject to the Bank Foreclosing and the Property being sold for a fraction of its real value.

There is also a problem with anyone else living in the House that is not on the Mortgage.  Once the person that took out the Mortgage dies the other person has to leave.  This is especially bad for a Spouse that may not have been old enough to go on the Mortgage.  Or a Child living with the parent.  They have to leave their Home with no where to go.

All around it is a very bad deal.  Just might be better to sell the House and live somewhere else.

Thu, 04/03/2014 - 08:47 | 4620703 Billy Sol Estes
Billy Sol Estes's picture

Or die alone watching TV and become a mummified corpse for the neighbors to find 4 months on.

Thu, 04/03/2014 - 08:21 | 4620608 max2205
max2205's picture

If you need the cash.....you'd be stupid to not take it....bank it or spend it before you croak

 

There is no such thing as a taxpayerfunded  bailout.....its a dollar holder funded bailout....tge Fed bas diluted that base so it just doesn't matter anymore

Thu, 04/03/2014 - 09:09 | 4620775 Waterfallsparkles
Waterfallsparkles's picture

I you really need the cash, maybe you would be wise to sell and move somewhere smaller and less costly.

Thu, 04/03/2014 - 09:43 | 4620903 BooMushroom
BooMushroom's picture

That would be wise. But what would be clever? And which do you think the ME generation will choose? Let alone the ones to follow
Mmm, this seed corn is delicious!

Thu, 04/03/2014 - 08:56 | 4620681 Billy Sol Estes
Billy Sol Estes's picture

I got an idea.

1) Take out reverse mortgage (if all other bills can relatively be paid for)

2) Buy a fuckton of gold with the proceeds in cash

3) Bury that shit in a national forest

4) Die and tell only your favorite offspring where it is, let him dig it up several months on after the tax cunts stop sniffing around where the money went

Eat Shit and Die America!

Thu, 04/03/2014 - 08:46 | 4620697 FreeNewEnergy
FreeNewEnergy's picture

My name is Ishmael and I'm a Baby Boomer. 21 months until I turn 62. I then qualify for SS (75%) and a reverse mortgage.

Here's how I plan to beat the fucking bankers to death. I inherited the house I'm living in from my parents, complete with "shitty" Cuntrywide mortgage. Stopped paying in Aug. 2009 after dad died. Bank started foreclosure in March 2010. Cue Crickets. I sued BofA in June, 2013, beating the SOL for fraud.

Am now fucking with BofA's lawyer. Talking negotiation, though planning on carrying this to the end, winning in court (have all kinds of goodies, like robosigned allonge, etc.). When I own the house and turn 62, I'm renting out two rooms (it's a big house) and then taking out a reverse mortgage since I'll own it F&C and have no kids. Gonna buy more houses with the proceeds, mostly cash.

When I leave the house or die, I hope the fucker is falling down. The bank can have it.

Fuck the banks.

Fuck the banks.

Fuck the banks.

Kum Boo-Yah! Cramer!

Thu, 04/03/2014 - 08:50 | 4620713 Billy Sol Estes
Billy Sol Estes's picture

People under 30 today will never qualify for SS. Maybe the 50% range, but the 100% age at this point is asymptotic.

Thu, 04/03/2014 - 09:46 | 4620916 BooMushroom
BooMushroom's picture

Pretty sure the value of the payment is asymptotic, too, always approaching, but never quite reaching, the inherent value of the paper the legislation was printed on.

Fri, 04/04/2014 - 15:38 | 4626064 Tale2cities
Tale2cities's picture

So your really an undercover member of the FSA.

Do NOT follow this link or you will be banned from the site!