Newsday continues to do a great job covering the reverse mortgage industry and over the weekend provided a well balanced article on the pros and cons of seniors using the product.
Newsday writer, Ronald E. Roel spoke with a range of people including Meg Burns, director of Single Family Program Development for the Federal Housing Administration, who said that reverse mortgages are likely to remain popular because of longer life expectancy and a desire of a majority of seniors to stay in their homes as they age.
The program has seen several changes over the last year including higher loan limits, the HECM for purchase, and co-ops which are expected to be eligible in the "next several months," said Burns.
Despite all of the improvements, critics say that reverse mortgages can be complex loans, and that borrowers often don’t understand the terms or how fees and interest charges can mount.
"By every account, they’re pretty complicated," says Richard Jurgens, a consumer advocate at the National Consumer Law Center (NCLC), Boston-based nonprofit group. "They’re pretty hard to navigate without help."
The NCLC released a report on reverse mortgages earlier this month and told Newsday that some big banks are mass-marketing reverse mortgages to consumers because they see the "potential for growth in a tough lending environment".
The article included interviews with others in the industry including executive vice president of the Agency for Consumer Equity, Dennis Haber and George Lopez, vice president of James B. Nutter & Co. Well worth the read.