“It all depends on where you live,” writes a Business Insider report published this week, in coverage of reverse mortgage products following the exit of Wells Fargo from the business.
The Wells Fargo exit, the article notes, comes following Bank of America’s exit earlier this year, but does not say anything about the availability of the product.
“Does that mean reverse mortgages are a bad deal for seniors? Does it mean such loans will no longer be available?” the article asks. “Absolutely not,” a mortgage industry consultant tells the publication.
Reverse mortgages make more sense in markets that have not been impacted as much by the decline in home values, the consultant advises, versus areas that have lost as much as 40% in home values. In those hard-hit areas, he tells Business Insider, the decision “makes absolutely no sense.”
The business has become too risky for some large banks, the article says, with some seniors not having met the tax and insurance payments on the loans.
But, National Reverse Mortgage Lenders Association President and CEO Peter Bell tells the publication, reverse mortgages still make sense for some people.
“For a senior that is cash-constrained and finding it difficult to make ends meet on a day-to-day basis, and if they have a mortgage that’s sucking up a lot of their income, they can use the reverse mortgage to get cash now, or to pay off their mortgage,” he said.
Read the Business Insider article.
Written by Elizabeth Ecker