Reverse Mortgages...not too popular

long term care.mp3

For my story today, I went downtown to the Syracuse Chamber of Commerce. I met with Donna Herlihy (pictured below) who I had spoken to on the phone yesterday. She's from Donahue Financial Management Group and helped lead this morning's seminar on Alternative Funding Sources for Long Term Care. The other speaker was Dick Downs, a reverse mortgage specialist from M&T Bank. After waiting for about a half hour, the seminar started. Unfortunately, there weren't too many interview options because only seven people came to learn about reverse mortgages, which is mainly where the discussion focused.

Donna and Dick explained that this seminar is part of a long-term series the chamber has been having called Navigating the Road Ahead. The series is focused on baby boomers who are trying to make plans for their future regarding retirement, life insurance and Medicare. They said compared to the past few seminars they've had, this was a surprisingly low turnout. Generally between ten and 20 people attend the seminars, so they seemed disappointed.

Anyway, I learned a lot about reverse mortgages, which are basically just what they sound like. Instead of someone taking out a mortgage on his/her house and having to pay the bank, the bank pays the homeowner. The homeowner doesn't owe any money to the bank unless he/she decides to move. The program is a national program that's been around for 20 years, but is gaining more interest recently.

The man I spoke to, Justin Fiedler, said he was there because his mother is interested. A lot of the other people there (and those who were supposed to show up, but didn't) were interested because of their parents or were from other banks in the area.

The idea of reverse mortgages seemed great to me until I came back to class and discussed it with Professor Nicholson. He pulled up some information on the computer, and that's when I realized why some people aren't so interested. Some say reverse mortgages are a scam because since the bank pays the homeowner, the bank owns the home after the homeowner dies...unless an heir to the homeowner is willing to pay off all the debt. YIKES. That could explain why there were so few people at the seminar...or it may have had something to do with the rainy weather.

Regardless, I came back to class with plenty of time to write my wrap, and I think I did a pretty okay job considering before this morning, I had never even heard of reverse mortgages and not only did I have to learn about them for myself, but I also had to explain it to an audience via the radio.