Some key reforms are making reverse mortgages more popular with elder law attorneys.
After falling into disfavor because of abuses and sometimes even fraud, reverse mortgages are returning to renewed popularity, according to a report in The New York Times “The Quiet Comeback of Reverse Mortgages,” which credits key reforms for making them more appropriate.
Stricter government regulations have weeded out most of the abuses in the reverse mortgage industry and have made it much less likely that anyone who signs one will lose his or her home. Additionally, because a reverse mortgage that follows the rules is federally insured, borrowers and their estates are not responsible if the home’s value decreases to a point where it is lower than the amount taken out under the reverse mortgage.
These changes make reverse mortgages an intriguing option for seniors who need money and who are not concerned about leaving their homes to their heirs.
It would be best to consider consulting with an elder law or estate planning attorney before taking out a reverse mortgage.
Reference: New York Times (July 22, 2016) “The Quiet Comeback of Reverse Mortgages”