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Putting Mortgage Misconceptions in Reverse by Andrew Good of Sun Post...

OmniHome Financing has a lot of negative press to battle when it comes to reverse mortgages. Recently, when syndicated columnist Ken Harney wrote about the dangers of reverse mortgages 's8211; specifically, about a 94-year-old woman who owed a half-million dollars after taking one out in 1988 's8211; members of the industry signed a collective letter to the editor defending themselves.



's8220;I don's8217;t take it as a personal attack,'s8221; explained Keith Murphy, one of three partners at OmniHome. 's8220;It adds to the miscommunication out there, and gives us a stumbling block to get over, to take extra time to counsel and let seniors understand what they's8217;re getting into.



's8220;It's8217;s part of the business we's8217;re taking on to help them fully understand the product before they decide to do it or not do it.'s8221;



For those unfamiliar, a reverse mortgage, or Home Equity Conversion Mortgage (HECM), lets anyone 62 years of age or older with some equity in their home take out a loan against that home.



As the website for the American Association of Retired Persons (AARP) puts it, it turns 's8220;the value of your home into cash without having to move or to repay the loan each month.'s8221;



Dave Bancroft, president of OmniHome, warned that there's8217;s 's8220;always room for abuse with seniors's8221;.



Prior to 1990, there were cases of equity share programs that could completely take over ownership of a lendee's8217;s home.



Bancroft said companies are no longer allowed to completely take over the home's8217;s equity because of a major revamping of regulations that year. Now, he said, the Federal Housing Administration ensures abuses like that can's8217;t happen.



's8220;There's8217;s a tremendous amount of miscommunication out there,'s8221; Bancroft added. 's8220;One thing I always say at the seminars is, 's8216;If someone doesn's8217;t understand it, they fear it. If they fear it, they make it negative.'s8217; When someone says 's8216;reverse mortgage's8217; and puts a negative connotation on it, I say they don's8217;t understand it.'s8221;



For seniors, Murphy added, it takes the burden of a monthly mortgage payment away, freeing up income to spend on medication, visiting family, or general, easing life in retirement.



Especially for the Depression-era generation, he added, it allows them to feel self-sufficient rather than rely on their children to pay off mortgage bills.



's8220;To the seniors, it helps their self-respect's8221;, Murphy said. 's8220;That alone I think is very valuable and emotional to them.'s8221;



On their reverse mortgage website, the company encourages seeking out a third-party counselor to help understand the ins and outs of reverse mortgages. For more information, call (877) 944-OMNI or visit them at 901 Calle Amanecer, Suite 150.

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