After reading “A Risky Lifeline for Seniors Is Costing Some Their Homes,” I decided to pass this important information on to you.
Defaults on reverse mortgages are hitting record highs and these loans are being blamed for turning seniors out of their homes!
For example, widows across the country have stepped forward saying they are facing foreclosure and eviction following their spouse’s death because they weren’t included on the reverse mortgage deed. The widows say they have no claims to live in the home unless they purchase it outright following their spouse’s death. This has been reported by the New York Times.
The Consumer Financial Protection Bureau is working on new rules for improving the disclosure of reverse mortgages and the (hidden) risks, as well as more supervision of lenders who issue these loans.
As you are probably aware, homeowners who are 62 and older can apply for reverse mortgages to borrow money against the equity of their homes. The loans don’t have to be repaid until the homeowner moves out or dies. Reverse mortgages are seen as a way for homeowners to use the equity in their homes for retirement. But the homeowners still have to pay property taxes, maintenance, and insurance on the home.
I’m looking out for the seniors in my family!