Dave tells Annie that the problems with reverse mortgages are several fold.
QUESTION: Annie wants to know what Dave thinks of reverse mortgages. Nothing but bad, according to Dave.
ANSWER: They stink. They are horrible. First off, it gets old people with a paid-for house to go back into debt. They have ridiculous interest rates and fees. Compounding all of that, since it’s the elderly that usually get these, there are huge incidents of fraud around this. The Federal Trade Commission lists it as one of the top kinds of fraud going on right now. Even taking a legitimate one out eats up the inheritance that you should leave to your children.