Certified Senior Advisors (CSAs) can—and should—function as a trusted counsel for prospective reverse mortgage borrowers to make sure they’re working with a reputable loan officer, says an article published in the CSA Journal’s Spring 2013 edition, published by the Society of Certified Senior Advisors.
Many people lack basic understanding of the reverse mortgage product, writes originator Alain Valles, MBA, CRMP, CSA. He views it as an educational opportunity “to share the pros, cons, and myths” about the loan and how they’re becoming a “potent” option for senior independence.
The article talks about how the FHA-insured Home Equity Conversion Mortgage program works, the current reverse mortgage market share in comparison to “forward” mortgages, and the financial challenges many seniors commonly face.
“The common denominator for these issues is that the majority of seniors want to remain independent and not be a financial burden on their loved ones,” Valles writes. “I venture that almost all CSAs are striving to accomplish just that. In many cases, a reverse mortgage may be the solution to that goal.”
After going through a list of the loan’s pros and cons, Valles acknowledges the five most common dangers associated with HECMs that are used improperly, including predatory “trusted advisors,” competency issues on behalf of prospective borrowers who may not fully understand how the loan works, and a failure to realize that senior borrowers are still required to keep up with property taxes, insurance, and maintenance.
“The solution to minimize the above dangers is to invite the senior’s family and trusted advisors into the conversation,” says Valles, adding that all CSAs should have a basic knowledge of the merits and risks of HECMs and how the product relates to seniors’ finances. “This is where CSAs can be of valuable service, not to explain or endorse HECMs but to make sure the borrower is working with a reputable loan officer.”
Access the full article here.
Written by Alyssa Gerace
