[slight edit -- jm]

It’s been a very weird day. The choir was just down at the Town Hall psyched up to sing the Danish National Anthem but instead the Band of the Copenhagen Police Dept started this.

Which half of us had been singing our hearts out to at a concert with Kay Pottie last spring, so what the heck, we sang along with them. And then I got home to this on the WSJ of all places …

Obviously the world has gone mad.

So yes, right now, your kids will be stuck with the difference since the home likely won’t sell for what theyll give you as a loan – or the estate gets stuck, technically, but same difference for most families I would think. Yeah if you have no kids, good deal. So it maxing out the credit cards.

Run out of money the day you die, right?

Good luck with the wife. I’m lucky, mine has figured out I’m worth more alive than dead, based on my earning potential vs. my life insurance policy. I’m.. not sure where that stops being true…

it gets paid back upon the sale. it basically ensures that you won’t be leaving the home to your children, unless they want to purchase it from the estate and pay off the loan. i suppose if you have no kids (or at least no kids that you wish to leave a home to) then it’s not a bad idea if you want to live up your ending years?

Are your kids stuck with the bill? Does the bank just take the home at the end of the mortgage? That would be “reverse mortgage” to me (well, except for the last year or so =) but I can’t see the banks wanting to do that.

The GAO’s report indicated that one of the problems they had been seeing was that the promoters of these mortgages were too often all too anxious to recommend “investments” that borrowers could spend their money on.

That’s too bad about your friend. My great-uncle, who had always been frugal with money, would buy anything a telemarketer would pitch in the last couple of years of his life. My poor great-aunt would try and hide the credit card, and he would be incensed. It was a terrible strain on their budget.

He could have ended up like your friend had reverse mortgages been around.

“It is also concerning that the FHA website is clearly promoting reverse mortgages. This, in spite of the fact that there are potential risks and reasons that a reverse mortgage may not be appropriate for some borrowers. It should be the duty of the FHA to provide potential borrowers with objective and balanced information. Their website should be a balanced resource- not a marketing tool.”

To which I’d like to add:

I have an elderly friend and (now former) neighbor who took out a reverse mortgage a few years ago.

She proceeded to go on a truly baffling spending spree. We’re talking about things like signing up for one of those network marketing schemes — and it had an initial membership fee of $2,000. She also joined a coffee bean of the month club which sent her a fancy grinder. And she wasn’t a coffee drinker.

She kept saying how much fun it was to spend the money, but I couldn’t help wondering if she was of sound mind.

In late 2007, she fell and broke a leg. After a stay in a rehab center, she moved in with one of her children — he and his wife live 200 miles away.

The house sits there, unoccupied. The family did fund a cosmetic fixup project so that it could be listed for sale.

A real estate agent’s sign was posted outside the house for eight months, but no sale. The sign came down in February of this year. I’m told that the house has since been foreclosed on. Vandals have also been trashing the place.

Like Igor, I think that the whole situation is revolting.