Laurie MacNaughton © 2017
In a recent Washington Post article entitled “Hidden costs of reverse mortgages can lead to foreclosure,” author Jenifer McKim states, “…the risks of the [reverse mortgage] financial arrangement are stark….” What McKim doesn’t say is that the day her article went to print, the Post’s fact checkers apparently all skived off work – or took one last late-summer excursion to Rehoboth.
The implication of the Post piece is that reverse mortgages have hidden fees, namely property taxes and homeowner’s insurance. Taxes and insurance are “hidden fees”?
Ms. McKim, may I make so bold as to enlighten you to a fact of homeownership? Taxes and insurance are not hidden fees of a mortgage, traditional or reverse. If you own real property, you owe property taxes. If you have a mortgage, you must keep your home insured. That’s how it works.
This is not new news to homeowners; indeed, in the first foreclosure example cited in the Post, the homeowner had a traditional mortgage before doing a reverse mortgage. Had she stopped paying her taxes or insurance under the terms of the previous mortgage she would have also faced the threat of foreclosure. The homeowner is now delinquent in her property taxes and facing foreclosure. This has nothing to do with her having a reverse mortgage. It has everything to do with a property tax delinquency.
There is a research piece here, but it has to do with the availability of property tax waivers for the elderly. Misguided reporting overlooks a true dilemma we, as a society, must introduce into the public dialogue. Uninformed dialogue, however, accomplishes nothing productive.
Ms. McKim, I am not unfamiliar with your work and have appreciated much of what you have written. Sensationalistic reporting such as that exhibited in this piece is unworthy of you, and certainly of The Washington Post.