When I posted about the Financial Industry Regulatory Authority’s view on reverse mortgages I received lots of emails from RMD readers who were upset about the report. Michael Branson the CEO of All Reverse Mortgage Company posted a response on the their website. Here is a quick excerpt from it:
In the FINRA announcement of June 26, 2008, FINRA states that “Whether the decision is right for you may ultimately depend on a number of factors – your health, your spouse’s health, other sources of income, the reason you’re tapping your home equity, when you do it, and how wisely you use your home proceeds. Then they warn that borrowers should also beware of broader financial impacts of the decision. All sound advice but not exactly the “reverse drawback” that the author throws out. Next, the author, Robert Powell tells you depending on the laws of your state, you may not have the same protection against creditors. Talk about vague threats! How many states will this affect and what creditors? What type of debts, and again, are they referring to excess cash if the borrower has a large amount of unpaid debts and they take a large sum of cash, put it in the bank and then creditors seek payment? Are they referring to potential future creditors? This is a terrible way to put fear into the hearts of senior borrowers.
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