Ask the Expert columns that appear in many newspapers and news sites are a way for these organizations to tap knowledgeable sources within their markets to help shed light on issues of interest for their readers. A latest edition involving reverse mortgages by The Sacramento Bee, leads to the question, do these columns effectively serve their purpose?
The column, entitled, "Ask the Experts: Reverse mortgages provide options," offers responses to two questions about the impacts of reverse mortgages, especially relating to trusts and paying off the loan after the borrower passes away. To provide information on these questions, The Bee turned to an estate planning attorney and a certified financial planner.
The responses did very little to provide valuable information to readers, essentially stating, you should refer to the mortgage documents for answers.
In one question, the reader asks if it makes sense for his father to utilize a reverse mortgage to invest the money. The response offers obvious questions about the current needs of the borrower and whether the return on investments would supersede the growing interest charges.
Both questions asked about how the mortgage debt is resolved when the borrower passes away. It is very surprising that in neither case are the "experts" able to provide an explanation of the repayment structure and non-recourse provisions. The response states that the lender is entitled to the total amount owed on the reverse mortgage and suggests that if the mortgage balance isn't repaid "fairly soon," then the lender can "claim ownership of the home."
Again, the recommendation is to "review the reverse mortgage documents so you are familiar with the provisions."
By failing the provide any information about the homeowner protections and non-recourse provisions inherent to the reverse mortgage program, the article suggests by omission that the assets of the borrower could be tapped to pay off the reverse mortgage in the event of insufficient value.
It is a reoccurring theme, but nonetheless frustrating that these types of articles that provide an opportunity to provide valuable information to commonly asked questions continue to miss the mark on accuracy and detail.