Leave it to “industry” analysts to tell CNBC that “reverse mortgages are quickly turning into a main source of income for struggling seniors trying to stay financially afloat”. RMD’s own Jim Veale has written about the use of the word income with reverse mortgages and why reverse mortgages are not income but not everyone got the memo.
CNBC’s Senior Editor Mark Koba writes that the mortgages come with significant drawbacks, such as high fees, complicated paperwork and the possibility of owing more than the value of the home.
"A significant portion of the folks do not really understand what they are signing," says Michal Ann Strahilevitz, associate professor of marketing at Golden Gate University Ageno School of Business. "Many people who took out reverse mortgages can’t actually tell you if it has been good or bad for them."
Not sure where Mr. Strahilevitz is getting his data since a survey complied by AARP has shown that consumer satisfaction with reverse mortgages have been very positive. In fact, 93% of borrowers reported that their reverse mortgage had a positive effect on their lives.
