In general, people can live and prosper anywhere they can afford, except senior citizens with reverse mortgages. Why? Because the reverse mortgage is a financial dead end. A property deed that by law can not be refinanced. Sell out or die is the key mortgage tenet.
Congress and the nation's state houses have long – very long – going back to 1981, considered adding refinance provisions to reverse mortgages. Somehow, they never got around to it. Senior citizens were left in the lurch to watch the advent of cheap money and the real estate boom pass them by.
Eight years of the Obama administration left the elderly without a financial policy. He left them significantly poorer than when he first took office. He bailed out financial institutions essentially with senior citizens absorbing the entropy of a closed system.
When interest rates fell to zero, senior citizens, who owned most of the saving tucked away in banks, saw their income from savings drop to zero and they got poorer.
When the government froze the cost of living increases for Social Security saying prices did not go up for the past eight years, the administration simply lied and the elderly got poorer.
When the banks increased their mortgage activity, issuing reverse mortgages at higher than average fees and hiking interest rates, the government chimed in and doubled the price for insuring the banks against loss.
Who paid for this cozy political protection racket? Senior citizens of course. Their home equity was vigorously siphoned off, and they grew poorer.
The national stash of reverse mortgaged homes – financially inert – is amassing untapped equity reserves at unprecedented levels (as the mortgage time line elongates the reserve line moves ever higher).
Now, after eight years of complete suppression, it represents one of the largest pools of stagnant wealth on the planet.
Once before, the nation's elderly owned the largest pool of wealth ever amassed on the planet. Social Security was enacted into law as a private pension plan administered by the government. When its reserves grew to unprecedented levels, the richest financial fund in history, so too did the lure of piracy.
Politicians turned to the elderly into wards of the state and un-privatized the entire fund. The elderly were thereafter people under the protection or care of another – a class of Cinderella-like vassals without any Prince Charming.
So with tones of wealth collecting in the attic, the government has locked the door and blocked the path to the good life. The distance from the ceiling to the sky has been marked off-limits to senior citizens. Echoing in the halls of government are politico voices singing the bankers tune, the reverse PT Barnum refrain, “Never give a senior citizen an even break.”
Joseph Tiraco is a resident of Forest Hills.