“Crisis? What crisis? TSX surges to biggest gain in 21 years amid global bailout bounce”
The Toronto Star, September 20, 2008

“Roller-coaster” has been a popular way to describe last week's wild economic ride. As the next leg of this journey is set to begin, there are a few sad lessons consumers can take from what has gone on so far and that they can use to bring reverse mortgages into focus:

Lesson 1. The guys in charge do not know as much about what is going on as they—and the consumers they are paid or elected to represent and protect—think they do.
By now it is crystal clear to everyone that the “wolves” were running the show and no one was protecting the homeowning "sheep," including the sheep. In fact, the “shepherds” were devoured by the wolves while they were hanging out together.
Reverse Mortgage Wise...
•    The US Reverse Mortgage Marketplace includes fraud, aggressive sales, and tapped-out property owners, too. Selling these mortgages is big business and growing. A few decades from now, how will this emerging industry be different from the current “toxic mortgage” industry?
•    Have consumers learned from the disasters faced by others, just how expensive sheep-like trust is whether it involves governments, bureaucracies, corporations, advisors, salespeople or themselves?

Lesson 2. When a financial deal seems too good to be true, you may signing up for something financially irreversible.
Although media and financial experts always talk money in “millions” and “billions,” it’s taken the collapse of the global economy for them to start writing out these stunning numbers with all their vacant-eyed zeros— $ 700,000,000,000 bailout—so that what they’re talking about makes sense to all concerned.
Reverse Mortgage Wise...
Reverse Mortgages devotes a full chapter (Chapter 6) to “Getting Good Advice” and stresses the value of learning the difference between being sold and buying. To learn exactly what you are getting yourself into, you may require salespeople and advisors to step beyond their “just trust me” comfort zone.

Lesson 3. Governments can tolerate and ignore more consumer loss and disaster than property owners can...except perhaps during an election or two.
Just ask BC’s leaky condo owners if you haven’t had personal experience with that one yet.

“We have reached a time when everyone’s culminating career is running their own business of UNRETIREMENT. Self-leadership is the essential skill.” Reverse Mortgages, Chapter 9: Onward & Upward, page 151.
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Mortgage Wise...Clarity on crisis
Gibran Nicholas, Chairman of the Michigan-based CMPS Institute, an organization that certifies mortgage bankers and brokers: “The number one issue that needs to be addressed as the government considers its rescue plan is the actual realistic value of troubled mortgage assets. The current market value of many of these mortgage assets assumes that more than 50% of subprime borrowers will default on their loans and US home values will decline to $0 making the underlying defaulted mortgages absolutely worthless. This is a totally unrealistic worst-case scenario and reflects extreme panic in the marketplace.”  What Are Troubled Mortgage Assets Worth??!!
 
Onward & Upward
PJ Wade