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Literally claiming dibs on the house once the owners die - or if you prefer, robbing the next generation of the lion's share of their inheritance and fobbing off grandpa with some cruise money. :boomer:
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Apr 28, 2023 00:35
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It’s insane how they are legal, but it works for the bank(the “it” being both the scheme and the government).
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Apr 28, 2023 00:47
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wesleywillis posted:Reverse mortgages, they seemed so scammy to me the first time I heard of them but I have no idea what the scam actually is. In other words, it's a scam in the general sense that the societal use of debt(credit cards, loans, and otherwise) to make up for wage stagnation is a scam. quote:What about selling your life insurance policy? Whole life insurance is effectively a scam if you're not rich enough to need it for estate planning. Anyone who has it is likely better off cashing it out and putting the money somewhere better. And for the love of gently caress, don't bother with that Gerber plan poo poo for kids.
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Apr 28, 2023 00:50
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wesleywillis posted:Reverse mortgages, they seemed so scammy to me the first time I heard of them but I have no idea what the scam actually is. You've mostly hit on it, yes. Reverse mortgages are targeted towards retired folks and pitched as great for them because they can get a new home (or can keep their existing one if they took a reverse mortage as a way to get out of defaulting on a traditional one), not have to pay monthly fees, and can even borrow against the value of the house. Except what happens is in the background the mortgage holder quickly racks up interest and fees, and when the homeowner eventually dies or has to move, the house either just goes back to bank or if they have inheritors, they have to be able to pay back the full loan amount in order to keep the house, which unless you're already rich is an extremely tall order without, you know, selling the home you stood to inherit.
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Apr 28, 2023 00:55
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If you don't have, or hate your kids, it's the opposite of scam. A great deal for you. In all seriousness there's nothing really wrong with them. It's not like they have insanely high rates the way a credit card or payday loan does. bamhand fucked around with this message at 02:26 on Apr 28, 2023 |
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Apr 28, 2023 02:22
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It's a way for old folks to get good spending money and gently caress their descendants out of any real inheritance. They get less than their property would be worth, but get to live out their days in it. The bank wins, the old person also wins.
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Apr 28, 2023 12:02
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The bank doesn't really win, they break even-ish. If they foreclose the house and sell it for more than what they're owed, the borrower still gets the excess funds back.
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Apr 28, 2023 16:00
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bamhand posted:The bank doesn't really win, they break even-ish. If they foreclose the house and sell it for more than what they're owed, the borrower still gets the excess funds back. The banks definitely win or they wouldn't advertise them during daytime TV.
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Apr 28, 2023 16:38
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I mean they win in the sense that any company that is selling a product in a capitalist society wins. But it's not like, extra scammy compared to other stuff.
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Apr 28, 2023 16:40
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Actuarial tables on their side. They might lose any individual sales, but they'll make up for it in volume!
Guest2553 fucked around with this message at 16:43 on Apr 28, 2023 |
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Apr 28, 2023 16:41
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One of the things about a Reverse Mortgage is that you're betting that won't live past a certain age. If you're 70 years old and you buy an RM and you draw down 10% of the equity in your house every year (for living expenses or to go on cruises or w/e), you'd better hope you die before you're 80 or you'll literally have no place to live.
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Apr 28, 2023 16:53
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In the UK there's a similar scheme where elderly people can sell the house but keep living in it until they die, rent free. IIRC one lady who did that ended up becoming the oldest living person in the UK.
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Apr 28, 2023 17:29
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lol american culture sucks poo poo, like even parents that dont do Reverse Mortgages just hope or plan to flip their house for retirement. so kids dont even get a inheritance or generational wealth isnt built. just barking "we're profamily" but not doing things that are profamily "
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Apr 28, 2023 19:54
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FMguru posted:One of the things about a Reverse Mortgage is that you're betting that won't live past a certain age. If you're 70 years old and you buy an RM and you draw down 10% of the equity in your house every year (for living expenses or to go on cruises or w/e), you'd better hope you die before you're 80 or you'll literally have no place to live. I think it's the other way around, the reverse mortgage is a bet by the bank that you won't live past a certain age or that you'll move out and trigger the repayment terms. As long as you're living in the home and abiding by the upkeep and such, you don't have to repay the loan. If you take one out at 70, and die at 75 then the balance of the loan is paid back from the estate, usually from the sale of the house and/or whatever's left from the money you had received at the start of the reverse mortgage. If you take one out at 70 and live until you're 110 and never need to move out and maintain the house and all that then the loan balance simply keeps growing without having to be paid and the bank has to take what it can get from the estate (or just the house? not sure) when you eventually die that will almost certainly not be the full balance. If you have no heirs or family to pass anything on towards, and you want to live out your golden years with money they're not bad. But, they are used to exploit people and that IS bad. Banks are not to be trusted.
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Apr 28, 2023 20:15
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Got this extremely convincing spam: Hello, Your surname might be linked to a huge inheritance payout. Please confirm your surname for more information. Regards, Mr William Chalmers Lloyds Bank.
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Apr 28, 2023 20:22
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El Spamo posted:hen the loan balance simply keeps growing without having to be paid and the bank has to take what it can get from the estate (or just the house? not sure) when you eventually die that will almost certainly not be the full balance. Inheritors can legally decline an inheritance, including debts, as long as they're also declining inheriting the actual asset the debt is for. If you inherited a house with a reverse mortgage whose value was lower than the actual mortgage itself, I imagine you'd probably just decline to inherit at which point the mortgage is void and the house defaults back to the bank.
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Apr 28, 2023 20:35
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Tunicate posted:In the UK there's a similar scheme where elderly people can sell the house but keep living in it until they die, rent free. France, not the UK. And there's doubt now over whether that woman was in fact the person she claimed to be, or that person's niece or something.
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Apr 28, 2023 20:38
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Weatherman posted:France, not the UK. And there's doubt now over whether that woman was in fact the person she claimed to be, or that person's niece or something. It's scams all the way down!
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Apr 28, 2023 21:08
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For a regular mortgage, the bank gives you a bunch of money and then if you don't pay them back, they take your house. In a reverse mortgage, the bank gives you a bunch of money and then if you don't pay them back, they take your house. They are almost exactly the same thing. There is not really a scam going on unless you think banks are there to give you free money and you don't need to pay them back.
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Apr 28, 2023 21:21
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It's a scam in the sense that they tell people they can totally afford it and don't worry because your home will only increase in value beyond perpetuity or mislead them about the monthly payment that suddenly double inside of a year. The right wing media take is that banks were FORCED to give people these loans by the government and that caused the 2008 housing crash but banks were falling all over themselves to give out these loans knowing (or hoping) that they wouldn't be the last ones holding the bag and basically stole millions by selling the debt. And even then, no one went to jail for it and most of the big banks got saved by tax payers. I'd call it a scam FMguru posted:One of the things about a Reverse Mortgage is that you're betting that won't live past a certain age. If you're 70 years old and you buy an RM and you draw down 10% of the equity in your house every year (for living expenses or to go on cruises or w/e), you'd better hope you die before you're 80 or you'll literally have no place to live. That's my plan
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Apr 28, 2023 23:07
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I mean if your argument is that all mortgages are a scam then sure, I can't really argue with that. But there's nothing special about a home equity loan that makes it worse than a regular mortgage.
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Apr 28, 2023 23:17
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I think it's really the generational issue that it comes out of what will become the estate in ~15 years. This is based on the demographic it's marketed to and how aggressively it's marketed. If used for cruise money it's very easy to spin it as screwing your children out of the last remaining proceeds of the magic money tree, only 50% of people even need to work economy.
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Apr 29, 2023 00:43
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It's not just marketing: you have to 62 or older to even qualify for a RM.
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Apr 29, 2023 00:57
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Weatherman posted:France, not the UK. And there's doubt now over whether that woman was in fact the person she claimed to be, or that person's niece or something. Now theres a good scam.
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Apr 29, 2023 01:07
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Its a scam because the banks really want you to do it if you’re old and at the least capable of making financial decisions thats why they advertise it three times in a row during Judge Judy reruns or whatever
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Apr 29, 2023 01:09
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Tom fuckin Selleck advertises that poo poo.
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Apr 29, 2023 01:30
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wesleywillis posted:Tom fuckin Selleck advertises that poo poo. He even goes so far as to say it's not a scam.
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Apr 29, 2023 01:43
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Has anything in the history of the universe that's been advertised as "not a scam" not been absolutely a scam?
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Apr 29, 2023 03:06
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I feel like there are tons of perfectly "legal" scams out there.
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Apr 29, 2023 03:14
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Case in point, as I watch a stream with ads: literally advertising prescription medicine to the general public.
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Apr 29, 2023 03:23
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Absurd Alhazred posted:Case in point, as I watch a stream with ads: literally advertising prescription medicine to the general public. This is illegal in the UK and thank gently caress for that. I notice that Americans in particular tend to call drugs by their brand name, whereas over here everyone refers to drugs by their generic name.
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Apr 29, 2023 03:45
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HopperUK posted:This is illegal in the UK and thank gently caress for that. I notice that Americans in particular tend to call drugs by their brand name, whereas over here everyone refers to drugs by their generic name. Eh there’s definitely a bunch where people refer to the brands too… Beconase, Nurofen, Clarityn etc. You do miss the commercials where they tell you not to take a product if you are allergic to it, though.
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Apr 29, 2023 05:22
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Reverse mortgages just represent the culmination of the process of undoing the downward wealth distribution of the mid-20th century. In the early 20th century the socialist/labor movement in America developed progressively more robust organizations and radical politics. The Wagner Act was a huge concession of that era, and there was a lot of open worrying among industrialists about a Soviet-style revolution. With the end of the WWII a whole generation of young men, many the children of labor radicals, came home with combat experience and deep networks with other veterans. The late 40s saw the most widespread and militant strikes in American history, and the mid-century general prosperity was another major concession to avoid a political/social revolution. Home ownership was a big part of the wealth redistribution, but so were things like making university education widely available, and stuff like good salaries and pensions. However, the goal wasn't to redistribute wealth, it was to pacify a potentially dangerous class struggle. By the time the Greatest Generation had died off their children (Baby Boomers) had come to just imagine that prosperity was normal, and didn't realize it had to be protected. Suddenly there were all sorts of things for older people to spend huge amounts of money on. Highly deprecatory assets like RVs started being marketed to comfortable retirees, which drains money from savings, as do the ballooning costs of late life medical care. The final coupe de grace is the reverse mortgage, which trades a stable asset (a place to live) for cash to spend on RVs and late-life medical care. Very little of that general prosperity is being passed down to future generations of working class people. The result is that all of the wealth that labor militants in the 20s and 30s won for their grandchildren in the 50s, 60s, and 70s is being reabsorbed by precisely the same people they'd won it from – finance capital and old industrial families. To the extent that this is a scam, it's a very, very old one.
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Apr 29, 2023 06:28
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Not a common scam. Yet. But https://www.cnn.com/2023/04/29/us/ai-scam-calls-kidnapping-cec/index.html ‘Mom, these bad men have me’: She believes scammers cloned her daughter’s voice in a fake kidnapping quote:CNN
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Apr 29, 2023 16:54
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I wonder if the voice really did sound like her, or just the overwhelming awfulness of that scenario made her think it did.
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Apr 29, 2023 19:05
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quote:“A mother knows her child,” she said later. “You can hear your child cry across the building, and you know it’s yours.” I mean to be totally cold-hearted about it, clearly not. It feels like this sort of thing is just going to thrive off the fervent middle class belief that there's a genuine significant risk of being violently kidnapped or robbed anywhere outside of [#suburb]
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Apr 29, 2023 20:37
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Strategic Tea posted:I mean to be totally cold-hearted about it, clearly not. yeah I mean read between the lines lol, dance recital, ski trip, drugs, Mexico. they targeted the exact correct type of person with the exact correct anxieties they'd have. if they'd asked for less money and she hadn't been in public at the time, she probably would've paid up
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Apr 29, 2023 20:49
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As mentioned before, my otherwise sharp, intelligent and knowledgeable parents actually fell for one of these scams. Much as I want to go "HERP DERP DUMB DUMBS ARE DUMB" there are things that scammers know to do that will short circuit the otherwise rational thinking parts of your brain. Child in danger, no time given to think, impact knowledge explained away by trauma, etc. And, it's a numbers game. If they can automate the whole thing, then it doesn't matter if most people don't fall for it, because enough people will.
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Apr 29, 2023 21:11
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Was a pretty popular scam in Argentina in the 90s/early noughties. Call a reasonably well off family at 2am and tell them you've kidnapped their child and then let them supply all the information needed to make it convincing (e.g What? You've got my Jessica?!)
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Apr 29, 2023 21:19
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bamhand posted:I mean if your argument is that all mortgages are a scam then sure, I can't really argue with that. But there's nothing special about a home equity loan that makes it worse than a regular mortgage. You need to seperate the concept of the mortgage from the reality. The concept is fine, a bit of a sad realization of a society without enough social security. The reality is there is a financial sector culture of ripping people off in the details. Initial closing costs, ongoing mortgage insurance, administration fees, inspection fees, and any other thing the bank can conjure up to ensure they maintain a positive balance sheet. Anything that you can think of to beat the system is already covered, and one person's financial victory is insured by thousands who lose. Is it a scam? Is it a bad deal? I think it's a bad deal and aggressively marketed which pushes it into scam territory and I can be absolutely administered as a scam where your payouts are so far below market value that it's a huge ripoff yet not far enough to trigger any punishment.
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Apr 30, 2023 00:40
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