Sure, critics have been raving about the modern outlaw flick Hell or High Water for its quietly funny, deftly wrought action sequences and long shots of the desolate West Texas landscape.
Yes, director David Mackenzie’s cops-and-robbers tale explores big themes like family loyalty, mortality and the pursuit of justice in a world of unjust systems bent on breaking the spirit of the individual.
But it’s also a movie about — wait for it — personal finance!
Sort of.
The movie takes place (spoilers ahead, obviously) during the height of the recession: Tiny towns are run down, people are out of work.
That includes the two brothers-turned-bandits at the center of the story.
And the reason for their bank-robbing spree? Saving the family ranch from foreclosure by Texas Midlands Bank so that brother Toby Howard (Chris Pine) — a father struggling to do right by his semi-estranged progeny — can give the land to his sons.
At this point, you may be thinking, ‘Wait a minute: How is it that a family ranch, apparently passed down through generations, is facing foreclosure? Wouldn’t it be paid off?’
The answer is, first of all, that probably wouldn’t make for a very good movie.
Second of all, that’s not necessarily the case if you take out a reverse mortgage, as the brothers’ mother apparently did before she died.
So what’s a reverse mortgage?
The way the brothers’ banker explains it to them is, “The bank loaned just enough to keep your mama poor.”
But Herb Ziev, a Plano, Texas-based mortgage banker with Benchmark Mortgage, described it a little differently.
“You’re just accessing the equity in your house,” he said.
Basically, a reverse mortgage is a “sort of quirky” home loan structure, Ziev said. It allows someone to take out a loan against their home (in this case, the family ranch on which the brothers’ ailing mom’s ramshackle house stands), which can be paid out as non-taxable income for the homeowner.
That arrangement can last for years.
“As long as you’re living in the home, you could very easily collect more money than the value of the home,” Ziev said. “The older somebody is, the higher percentage of that equity they can get.”
But if that was all there is to reverse mortgages, the one at the center of Hell or High Water wouldn’t be a very effective plot device.
It also wouldn’t make much sense for such loans to exist.
Indeed, reverse mortgages come with lots of caveats.
The first caveat, Ziev said, is that you have to be 62 years or older to take out a reverse mortgage in the first place.
And you can only take out a reverse mortgage on your primary residence — which means that if, say, the Howard family matriarch in Hell or High Water had tried to take out a reverse mortgage on a vacation house in Galveston, Texas, she would have been out of luck.
Oh, and you also can’t move away once you’ve taken out the loan.
“If the person who takes out he reverse mortgage for whatever reason, if they vacate the house, then the (loan) amount becomes due,” Ziev said.
Then, when the reverse mortgage holder dies, there’s a whole set of possible outcomes.
If the reverse mortgage holder has no heirs, the bank would just get the property and everyone walks away unscathed.
But the Howard brothers want that land — at some point Toby mentions there’s oil under it, and he wants his kids to get the money from that discovery.
In that case, Ziev said, the heirs are on the hook for either the value of the loan or 95 percent of the fair market value of the home.
“Obviously, if they want to keep the house, they’re going to have to pay 95 percent so they could’ve very well needed to rob banks,” Ziev said with a chuckle.
And that brings us back to the bank robberies of the fictional Texas Midlands Bank branches.
Spoiler alert again: Toby Howard manages to stave off foreclosure in the nick of time. And he puts the ranch in a trust for his kids — a trust that the Howard brothers’ sympathetic banking adviser suggests they have Texas Midlands manage.
Dallas attorney Kevin Ross said that actually makes some sense: Theoretically, the bank could make more money than it lost in the robberies over time, assuming the boys are raking in cash from the Texas tea under the ranch. (Ziev hadn’t seen the movie, but he guessed that the oil wasn’t disclosed when the ranch’s fair market value was determined.)
“The bank charges a percentage fee of assets for said trust,” Ross said. “The way the law goes in Texas is you own the land from the sky down to the oil and gas in the earth.”
So, the moral of this surefire Oscar contender? Reverse mortgages can be financially advantageous, but they’re definitely not for everyone.
