Margaret has sent the following question in the ask ARLO! blog

I have a reverse mortgage and I’m having problems with it. Was it legal for me to get a reverse mortgage without my own lawyer to explain the situation to me? I never knew the pros and cons of a reverse mortgage. I think it’s a legal way to Swindle homeowners out of their homes. How can I get out of the reverse mortgage?

I am sorry if you have regrets now, but you are free get out of the reverse mortgage at anytime without penalty by refinancing into a traditional loan, paying off with other funds, or simply selling your home.

If you just don’t like the balance rising simply make a repayment each month towards the interest charges and protect your equity position.

You’re in the driver seat! 

Reverse Mortgages are Highly Regulated 

Furthermore, I cannot agree with such a broad and defamatory statement as this when the resources are so readily available.

I don’t know why you feel you were denied access to your own lawyer or any opportunity to learn the pros and cons of a reverse mortgage.

The lender must allow you to pick your own HUD approved counselor and you must attend a HUD-approved counseling course.

The counselor must spend at least 45 minutes to an hour with you and I have had borrowers who said their session lasted over 4 hours with all the questions they had.

In short, the number of questions and the time spent is only limited by your asking and that must happen before you can even start the loan process.

It’s only after you attend and complete this counseling course that you can then choose to proceed with the loan.

Next, you apply, and your processing takes a good 30 – 45 days during which you are free to take your application package to anyone you choose for advice.

I cannot defend or chastise your originator because I do not know who that was, but we encourage borrowers to get advice from family, any legal or accounting professionals they choose.

Finally, when you receive your loan documents, you have another 3-day right to rescind the transaction with no costs even after you sign.

This period does not include the day you sign, Sundays or Holidays so your 3 day right of rescission turns into a minimum of 4 days and often 5 days.

So, you have yet another opportunity to seek assistance from anyone you choose during this time with your actual loan documents.

Are you saying you were denied these opportunities?

Even if you didn’t make a single phone call or visit a single attorney during any of this time, if you do just an internet search on your own words “pros and cons of a reverse mortgage”, the term auto-fills in the search bar meaning it is a popular phrase and there are more than 200 URL’s of available results from attorneys, lenders, HUD, AARP, and many others.

The last thing any lender wants to do is to “swindle you out of your home”

And you had more than ample time to seek your own attorney to assist you to decide if you felt you were incapable of doing so.

If you feel that you made the wrong decision, I can understand that, we have all had buyer’s remorse at one time or another.

And many borrowers ran into bad originators or lenders from time to time who may not have been the best advocates for the borrowers in the way the loans were handled.

But I will not agree with any characterization that seeks to paint the reverse mortgage process as one that doesn’t give borrowers an opportunity to have their own advisors, legal or otherwise, review the transaction or as one that is solely trying to swindle homeowners out of their homes.

I do not know what state you live in, but many states also have their own cooling off periods designed to give borrowers additional time to consider the transaction at the beginning of the loan as well.

Here in California, lenders cannot proceed with the loan for 7 days after the counseling to give borrowers even more time to consider the loan.

If you are ever unclear on any the terms or ramifications of any contract, be sure to include your trusted financial or legal advisor.

The loan process is a lengthy one.

There is no reason whatsoever not to make sure you understand everything in advance instead of experiencing remorse later.

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