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Are services for seniors really beneficial as seen on TV

by Willy / February 2, 2013 1:11 AM PST

You can get adult diapers, motorized chairs, stair rides, inhalers, etc., AND all no cost or low cost to you, Senior citizen. Much of it applies to seniors and SS benefits or some benefits that seniors get. No need to fill forms, they do it for you. So, do you think its more of a scam or pushing of services that really go overboard.

I read an article that all those scooters being sold aren't really needed, but the paperwork got through anyways. It's one thing to provide a service but another when it seems you're practically becoming a pushy sales/marketing gimmick.

What about those "reverse mortgages" they want to go after your house too. They make it sound so simple, but your house is on the line sorta speak. Here, even if you get the paperwork and read the details, not everyone should so readily apply if you're that deseparate for funds.

What do you think? -----Willy Happy

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no advertising has a purpose other than making money
by Roger NC / February 2, 2013 2:16 AM PST

a point to remember.

That said, there is good in such, but as you point out it has been abused, more than once.

If I recall and understood correctly, most of those at llittle or no cost either involve medicare plus supplemental insurance or medicaid.

And medicare, medicaid, and insurance often matter more of crossing t's and dotting i's than logical or compassion reasoning.

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No free lunch
by Steven Haninger / February 2, 2013 2:34 AM PST

Be wary when anyone tells you they are looking out for your best interests. When someone extends to you their right hand to shake, their left hand might be giving you a shakedown. Learn a little bit of Latin. Start with "caveat emptor". That's what I think. Happy

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My father
by James Denison / February 2, 2013 5:10 AM PST

did a reverse mortgage on his home before the housing market crashed. That mortgage was for more than his former house in Florida is now worth. A relative lives in the house for free right now till the bank finally forecloses on it, which they've put off for almost 1.5 years now. I think they prefer someone live in the house free rather than leave it empty, until the market makes it worth their while to foreclose. So, I'd say for Dad it worked out just fine up til time he died.

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limited knowledge of reverse mortgage
by Roger NC / February 2, 2013 5:59 AM PST

in fact, almost no facts I'm sure of.

Something to be very cautious about, but in some cases it might work out well.

I don't know what the details are, the first question is what happens if the person actually did outlive the revese mortgage.

When property was thought to be continually going up, reverse mortgage could work for the bank and the selling owner. The bank generally made money because the owner/seller died before the reverse mortgage actually paid the value of the house.

I'm sure my ignorance of the details has led me into some fault.

I have been surprise to see the commercials during the housing downturn. But in hindsight, it seems that the commercials have resume, or increased at least, since the housing market seem to bottom out about a year ago.

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Little known then bam...
by Willy / February 3, 2013 12:30 AM PST

I think the reverse mortgage was little used or a big secret that only few knew. Once, it seems that when the markets or banking debacle took place all of a sudden, this new found asset could be used. What may have been a nitch market grew overnight, it seems.


Does that makes sense to you? Look at all the links to explanations. More paperwork to get confused in. -----Willy Happy

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A reverse mortgage is the dumbest idea I've ever heard of.
by Ziks511 / February 3, 2013 10:18 PM PST

Mortgage your house for $50,000. They calculate the interest in a way most beneficial to them which compounds monthly until you die or they own the house. How long would it take until they ask you to move out. And what about your kids? Don't you have any family feeling? I refer them to my ex-wife. If that doesn't provide enough evidence to cause them to avoid the reverse mortgage, they should be assessed by psychiatric services.


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It's not supposed to work that way but I'm sure
by Steven Haninger / February 3, 2013 10:33 PM PST

you can find horror stories from those taken by unscrupulous lenders. From what I understand, as long as you're alive and take care of the property and pay taxes on it, they cannot toss you out. You can only borrow up to some established line of credit. Once that's reached, you're done unless the property value goes higher. One real risk I see is that cannot move as the debt will come immediately due. This also goes for moving into a nursing or managed care facility. At that point, you must sell and pay the debt or someone with a POA must do it for you. You won't be passing your entire home value to your heirs either. If you've no heirs, it might not be a bad idea. You'd just better hope you die before exhausting your line of credit or are no longer able to care for yourself.

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55-60% Value
by James Denison / February 4, 2013 9:15 PM PST

That's about what you can take out on a reverse mortgage. It's similar to a regular mortgage except "reversed" or backwards. In a regular mortgage you take out a loan for about 80-95% of it's value (rest is by down payment required usually) and then spend 20-40 years paying it off.

For example on a regular mortgage you take for $200,000 to be amoritized over 30 years at 6%, your payments would be$1,199.10 per month. Now if you multiply those monthly payments by the months, you end up with a total cost of $431,676 or paying more than twice the amount. Actually you'd pay 215% of what the house was originally worth.

Let's reverse it and that same house you don't get the best reverse mortgage, but do get $100,000 lump sum from it at age 65 at the same interest rate. If you lived to be 80, then over that 15 years the cost to pay off the mortgage would be almost $152,000. If you have heirs, and the house is worth more than the amount owed, they can sell the house for a greater amount and pay off the debt on the reverse mortgage and the difference is theirs. So, if the house was worth exactly the same $200,000 those 15 years later they'd still have $48,000 minus expenses, probably clearing at least $40,000 from it.

If however there was a housing crash like recently experienced and the value of the home dropped to about $160,000 then any who could have inherited are under no obligation, walk away and let the bank take the house. Either way, their last parent got to enjoy the fruit of their labor up till the end, because they not only got half of what the house was worth, but also gained for every month they lived in a rent free home. If the rental rates would have been $1000 per month on the home, and they lived another 15 years or 180 months in the home, you can add $180,000 to the reverse mortgage amount of $100,000 and the value to them was $280,000 for that time.

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More fun, let's figure rental value
by James Denison / February 4, 2013 9:54 PM PST
In reply to: 55-60% Value

The parents starting buying the home 45 years before the last one died. What if instead they had rented all those years, the same house? Rental value is usually less than mortgage cost at any same given time. So, let's assign some rental values over those years. To make it easy we'll say the rent went up $50 per month every 5 years, starting at $700 per month. We'll also assume those last 15 years the rent would have been constant, so this matches the figures used in previous post, perhaps due to stagnated rental market. Here's the chart.

year to months rent cost
5 60 700 42,000
10 60 750 45,000
15 60 800 48,000
20 60 850 51,000
25 60 900 54,000
30 60 950 57,000
35 60 1000 60,000
40 60 1000 60,000
45 60 1000 60,000
Total Rental Value = $477,000

So you take that total rental value of the property, add to it the amount they received from the reverse mortgage, and you get $577,000. Compare that to the total cost $431,676 of their original mortgage across 30 years, and they came out ahead by $145,324 computed that way. If the property is still worth $200,000, then their heirs can still collect about $40,000 after expenses in paying off the reverse mortgage and selling the property, which puts a final gain figure of $185,000 for the family ahead of what was paid out originally.

So, can a reverse mortgage be a good thing?

The alternative is the parents may live at a sub standard level, which could affect their health during that time too, but at least when they die the inheritors can sell the house and have all that gain for themselves, gain they themselves didn't earn. Furthermore, in some states there would be added inheritance taxes to deal with. A final dagger in the heart of inheritors would be to discover medical costs the govt may have paid are to be reclaimed under the Estate Recovery Act and they end up with little to nothing anyway.

So, why not have the parents take out the equity, use it for their betterment in their retirement years, and leave less for the Estate Recovery Act if they end up on medicare?

It may not be for everyone, especially not for those who can afford to live out their retirement years comfortably without the reverse mortgage and can leave the home debt free and not subject to the fed's Estate Recovery Act. For some however, it's not stupid, but can be a wise move.

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As always a gamble
by Steven Haninger / February 5, 2013 2:15 AM PST

and whether or not it was a good move isn't known until it's time to cash in your chips. As for inheritance, I'd not want a parent to worry about what they were leaving. Unless it was such as a business I was due to take over, I'd want to use inherited money in such a way as would be approved by the one(s) leaving it. If I didn't earn it, it's not mine.

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isn't all medicaid money received
by Roger NC / February 5, 2013 7:48 AM PST

recoverable against the estate? not medicare but medicaid?

Seems I recall a news story where some local medicaid office made a mistake and tried to evict a surviving spouse from a house in a medicaid recovery claim. But the rule was the spouse had lifetime rights to the house then Medicaid got it.

At least that's what I though I saw.

Those reverse mortgages pay lump sump? I misunderstood, I thought there was a contract for the bank to pay you monthly payments, up to a set amount anyway, until you died. If you died early they got the house and an extra profit. That's without out a spouse of course.

But if you do go into a nursing home, it's all gone.

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mostly correct
by James Denison / February 5, 2013 8:50 AM PST

You can them in lump sum, you can take monthly payments. My choice would be lump sum deposited in an interest bearing certificate that paid at least quarterly and figure an amortized schedule of reduction involving both interest and principle across the next 20 years since few live past 85.

Spousal rights would depend on several factors. Is it the same spouse as when the reverse mortgage was done, or was there no spouse at that time? If so, then the spouse probably could be foreclosed against and the house would probably only be in the name of the original recipient of the reverse mortgage.

Usually and probably required under HUD reverse mortgages, and certainly if both spouses were listed as property owner, the spouse would be figured into the reverse mortgage before it was issued and have same rights under it for each one.

I suspect stories of "spouses" being kicked out of a home with a reverse mortgage on it involves property owners who were single when they first received such mortgage and then married.

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story I remember the medicaid office back
by Roger NC / February 5, 2013 9:51 AM PST
In reply to: mostly correct

down, said it was mistake, the surviving spouse did have a lifetime right to the house, but at the spouse's death it would be claimed. Of course that would mean couldn't sell also.

I'm sure you're right about when they were married would make a difference under many benefits, rights and ownerships.

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This is the type, if reverse mortgage is needed or wanted
by James Denison / February 3, 2013 10:47 PM PST

The govt insured HECM reverse mortgage.

Some information

Before applying for a HECM, you must meet with a counselor from an
independent government-approved housing counseling agency. Some lenders
offering proprietary reverse mortgages also require counseling. The
counselor is required to explain the loan's costs and financial
implications, and possible alternatives to a HECM, like government and
nonprofit programs or a single-purpose or proprietary reverse mortgage.
The counselor also should be able to help you compare the costs of
different types of reverse mortgages and tell you how different payment
options, fees, and other costs affect the total cost of the loan over
time. You can visit HUD for a list of counselors or
call the agency at 1-800-569-4287. Most counseling agencies charge
around $125 for their services. The fee can be paid from the loan
proceeds, but you cannot be turned away if you can't afford the fee.

Reverse mortgage loan advances are not taxable, and generally don't
affect your Social Security or Medicare benefits. You retain the title
to your home, and you don't have to make monthly repayments. The loan
must be repaid when the last surviving borrower dies, sells the home, or
no longer lives in the home as a principal residence.
In the HECM program, a borrower can live in a nursing home or other
medical facility for up to 12 consecutive months before the loan must be
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by James Denison / February 4, 2013 10:04 PM PST

the part above under "some information" is a quote from that link.

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