TIME Magazine feels that one of the top priorities of the Consumer Financial Protection Bureau should be to make reverse mortgages easier to understand.
Time: Make Reverse Mortgages One of Consumer Protection Bureau’s Top Priorities
While the bill which would create the bureau has yet to pass the Senate, TIME says, “America needs to clean up student loans, make reverse mortgages easier to understand and crack down on payday loans.”
According to the article, reverse mortgages should be a great financial innovation tool in theory. Stephen Gandel writes:
They allow seniors 62 and older the ability to basically sell their house but continue to live in it mortgage-free. The buyer is the bank, and it gives the homeowner the value of their house minus the cost of the loan in exchange for the right to sell the property when the person or persons die or move out
I thought we were done explaining that a borrowers do not sell their home to the bank when they take out a reverse mortgage, but apparently not.
We still have a long way to go in educating the general public about reverse mortgages.
Note: We’ve sent a respectful letter to the editor offering our help to explain how a reverse mortgage works. So did Shannon Hicks, read it here.