Jim Cramer’s TheStreet.com recently published an article about the changes that stem from the Housing and Economic Recovery Act of 2008. Even with the fees being capped, The Street reports that critics still think reverse mortgages are expensive.
Peter Bell, president of the National Reverse Mortgage Lenders Association, an industry advocacy group, admits these loans are "complex," and advises candidates to speak "openly and candidly" to counselors before taking the plunge. But he doesn’t think reverse mortgages are expensive.
"Compared to what?" he says. "We’re saying, ‘I’ll give you a loan for an unidentifiable amount of money, you can have it for an unknown amount of time and you may pay me back less than I gave you.’ There’s no other loan like that. With a forward mortgage, you pay interest and fees every month. We have to collect that money upfront."
Amen.
