Here is an interesting piece from the CFPB highlighting some concerns about reverse mortgages. The implication being that the rules for issuing them will change.

Primary concerns:

  • Awareness of reverse mortgages but a lack of understanding of how they work
  • Your principal will increase over time and your equity will fall
  • You must still pay taxes and insurance. Many don’t realize and fall into arrears
  • The youngest eligible age for borrowers is 62, and the average age of new borrowers is falling towards that number
  • SEVENTY PERCENT of borrowers are taking a lump sum. Now that is alarming!
  • Deceptive marketing
  • Need for more counseling on mortgage products