Time to Consider a New Name for “Reverse” Mortgages?
Print This Post
ReverseMortgageDaily posted a few days ago about another step backwards for reverse mortgage marketing. This time, a New York Daily News article about rising subprime mortgage foreclosures in New York managed to bring reverse mortgages into a negative light by quoting a City Councilman:
“We need to get the attention of the attorney general and DA’s office,” said City Councilman Leroy Comrie (D-Queens). “A lot of these activities are illegal. We have a high rate of senior citizens and immigrants here, and these lenders are preying on the elderly with reverse mortgages that are really subprime loans.”
Then a few paragraphs later, the “r” word is again used in a not-so-positive vein:
Sen. Chuck Schumer (D-N.Y.), a fierce industry critic, claims subprime lenders routinely targeted many black and Hispanic homebuyers with otherwise good credit histories in a form of “reverse-redlining.” Those borrowers were steered into high-interest loans even though they were eligible for conventional prime rate loans.
Not too difficult to imagine the masses reading this article coming away with a decidely negative first impression of reverse mortgages.
As ReverseMortgageDaily noted, reverse mortgages should be seen as a big part of the solution for elderly home foreclosures, not the problem.
Still, it seems sometimes that the term “reverse” used in a financial/mortgage context is a magnet for negative sentiments. Real-life reverse mortgage horror stories of a generation ago certainly certainly share a big part of the blame for this. There have been other negative associations as well.
A few months ago we commented on the confusion some visitors were having drawing a distinction between reverse mortgages and “inverse” mortgages - the latter being a real scam ultimately shut down by authorities in New York.
It makes you wonder if its time for a makeover and a new and improved moniker to describe these products that can do so much good for people in the right circumstances - when fully understood. Home savings retirement loan? Home equity retirement loan? Retirement Equity Loan? Somewhere there’s a PR/marketing wunderkind with just the right phrase that could capture the many positive features of RM’s and by bypass the negative impressions too often associated with “reverse mortgage”.
In the meantime, we’ll continue our efforts to provide independent, accurate and objective reverse mortgage information to our visitors.
A Few More Related Articles of Interest:
April 12th, 2007 at 10:01 am
I agree. It’s time to rename the Reverse Mortgage. Remember the days when “Second Mortgages” were taboo and nobody would ever consider taking one? Then they started being called Equity Loans, now just about everyone who owns a home has some form of Equity Loan on it.