Declining Reverse Mortgage Industry Pushing Hard Against Indebted Seniors and Their Heirs

Info Tech  > Home Living >  Declining Reverse Mortgage Industry Pushing Hard Against Indebted Seniors and Their Heirs
0 Comments

On the surface, a reverse mortgage loan might seem like a brilliant plan for a senior homeowner. Take your home’s equity and use it to secure a loan, as long as you’re at least 62 years old, that is. And the best part? The loan doesn’t need to be paid back until you move out — or until you die.

With a setup like that, what elderly person wouldn’t be tempted to opt for a reverse mortgage if he or she was in need of cash and couldn’t get it any other way? That was the idea, at least. But a recent story in The New York Times shines a light on the unforeseen complications of a system that, on paper, sounds like a flawless scheme.

Federal rules stipulate that the heirs to the reverse mortgage should be offered to settle the loan for a smaller percentage of its full amount.
Federal rules stipulate that the heirs to the reverse mortgage should be offered to settle the loan for a smaller percentage of its full amount.

Take Isabel Santos, the 61-year-old subject of the story, whose father came to America from Cuba in the 20th century and worked to buy a home. Now, Santos’ father is dead, and the home he worked so hard for is slipping away, threatening her inheritance in the process.

Federal rules stipulate that the heirs to the reverse mortgage should be offered to settle the loan for a smaller percentage of its full amount. Instead, many reverse mortgage companies are putting intense pressure on the heirs, some even threatening to foreclose on the homes unless the debt is paid back in full, the Times reports. That data, so the story says, comes from housing counselors, state regulators and families currently suffering through reverse mortgage drama.

But why would seniors be in need of large loans like that in the first place? For one thing, medications aren’t cheap, and the older a person gets, the more of them he or she is likely to be reliant on. Another factor might be housing, which can also be pricey, especially if the senior is looking to move into an elderly care facility or some other type of assisted living program. When the financial hammer falls, the cost has to be transferred on to someone. And based on this Times piece as well as reports in Consumerist, the buck is being passed to the seniors’ heirs.

Even some reverse mortgage companies themselves point out that the loans shouldn’t be taken out by just anyone. As the Best Reverse Mortgage group says, interest rates for these specific types of loans can be highly variable, and that can cause a great deal of economic uncertainty for the seniors who rely on them. In fact, the smaller the loan, the more likely the senior is to run into some type of problem with it in the future.

If recent numbers from the Federal Reserve are any indication, debt among seniors ages 65 to 74 is currently rising faster than debt from any other age group. Couple this with the fact that the reverse mortgage industry as a whole has been suffering since the initial pangs of the recession, and you have a potent cocktail for disaster. The outcome? Unfortunately for both indebted seniors and their heirs, that still remains to be seen.

Leave a Reply

Your email address will not be published. Required fields are marked *

what supplements lower sex drive best sex pills for couples does kroger sell male enhancement pills to enlarge your penis fruits that help in erectile dysfunction 5 day forecast sex pill how to prepare natural viagra reviews rhino male enhancement pills for premature ejaculation and do they work natural erection supplements best non stimulant weight loss supplement is there an over the counter weight loss pill weight loss pills at sun tan city how much is keto one gummies trubio keto gummies oprah best weight fat loss supplements for weight lifting chinese weight loss pills bee pollen adeles weight loss pill will doctors prescribe diet pills for weight loss pill that promises weight loss garcinia cambogia weight loss pills meridian ms keto acv gummies side effects blood pressure is vista keto gummies safe phenocal weight loss pill reviews mens health cbd gummies cbd products for fitness online cbd medical benefits anti depressant how do cbd skin products work green roads cbd gummy frogs 15mg delta 9 thc gummies review what do hemp gummies do to you thc wonka gummies how to take cbd for hip pain can you take thc gummies with melatonin hemp gummies for 14 year old thc gummies reviews cbd products tsa do cbd gummies with melotonin lower blood pressure anatomy one cbd gummy reviews is twin elements cbd gummies legit