Loan Evaluations owner, Kyle Waters recently discussed reverse mortgages and how they are advertised with New Orleans City Business.
When it comes to reverse mortgages, two very different sides are often presented: the dangers and benefits of the
product.
A reverse mortgage is a loan accessible to homeowners who are 62 years or older that lets them convert part of the
equity in their home into cash.
The Consumer Financial Protection Bureau warned consumers June 4 to not be misled by reverse mortgage
advertising, which often depicts images of elderly retirees on vacations and include pamphlets with very minimal
information.
But Kyle Waters, owner and manager of Metairie-based Loan Evaluation Services, said reverse mortgages are a
“good, legitimate product.”
“It has its place in helping people get needed funds without having to sell their house or taking out a loan,” Waters
said. “And like any industry, there are companies who will take advantage of anything.”
However, Waters urged that regulators need to ensure the consumers, especially those who are most at risk, are
protected. “This is a loan, so there is indeed a debt,” Waters said. “But it’s the repayment method that is different
and what makes it beneficial to elderly people who are in need of funds.”
Like any other financial product, Waters said the consumer has responsibilities as well.
“It’s not for everyone. Some say it’s a last-resort product and there may be some truth to that,” Waters said.
“People need to understand the product, to maintain insurance (property and flood if warranted), property (taxes),
etc. like any other loan.”
He urged the importance of reading and understanding the requirements like in any other contract.
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