During this time of economic uncertainty, reverse mortgages are receiving quite a lot of attention in the press. The system of providing reverse mortgages to allow seniors to cash in on some of the equity they’ve built through home ownership is still going strong, even though it has experienced some brushes with fraudulent claims over the last few years. Banks and government agencies continue to work to make reverse mortgages more powerful and less costly for seniors who need the extra financial cushion a reverse mortgage can provide.
Fraudulent Reverse Mortgage Practices
Unfortunately, any system that is designed to bolster income can fall prey to shiftless individuals who want to make some quick cash. A recent scam has been uncovered that included corrupt loan officers and other administrators placing homeless seniors in houses and then collecting the reverse mortgages themselves. The seniors were unaware of the scam, and the scam artists made off with hundreds of thousands of dollars. The Federal Housing Administration is working to create qualification safeguards to protect consumers and the lending agency from any further damage through fraudulent reverse mortgage claims.
Some Good News Develops
Reverse mortgage are becoming more and more attractive. A growing amount of seniors are looking at these products every year as a tool to supplement their retirement funds. Although these loans have costs associated with them, the product’s attributes continue to make them attractive to many retirees. Specifically, there is no repayment requirement as long as the borrowers continue to live in the home. Generally, the lender does not receive repayment until the borrowers move or pass away. This is a very attractive attribute for borrowers on a limited income.
Positive Reverse Mortgage Stories
There are many situations in which these loans have improved borrowers lives immensely. Borrowers who risked foreclosure have saved their homes by utilizing the benefits of reverse mortgages. Many seniors have used these loans to pay property taxes, eliminate mortgage payments and increase cash reserves during their retirement years. Money that would otherwise go towards housing expense could now be used to maintain their overall standard of living. These loans have improved the lives of many seniors over the years.
Costs Continue to Fall
The best news about reverse mortgages, however, is that their cost have seen a steep decline recently. Reverse mortgage lenders continue to find new ways to make these products more attractive to borrowers. This is an incredible development for borrowers who could use this product the most. Closing costs have come down dramatically and in some case, has resulted in up to $10,000 more in available funds for some borrowers.
Want to find out more about reverse mortgages, then visit Tim Begert’s site on how to choose the best reverse mortgage for your needs.
categories: reverse mortgages,HECM,seniors,home equity,retirement,equity
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