A much-anticipated report released Monday from a commission of housing experts projects more interest in reverse mortgages in the coming years. Due to the need for more aging-in-place solutions, housing policy must be directed at the aging group with steps to ensure consumers understand reverse mortgages, the Bipartisan Policy Center Housing Commission writes.
“…steps should be taken to provide effective guidance to ensure consumers understand the mechanics of reverse mortgages, including the risks and benefits of these products,” the report states under its aging in place recommendations. “A white House conference could bring together top federal officials and key players in the private and public sectors to draw national attention to the issue of senior housing and to catalyze development of a coordinated approach to aging in place.”
The report, titled “Housing America’s Future: New Directions for National Policy,” focuses on four major points; housing the growing senior population one among them. The recommendations are intended to help Congress in policy measures designed to support and sustain the housing market recovery.
In addition to calls to action that will help bring private capital back into the market, such as a gradual reduction of lending limits for FHA, Fannie Mae and Freddie Mac loans, the report notes a growing emphasis that should be placed on senior housing options.
“With limited retirement savings among some aging Baby Boomers, and a shrinking social safety net, consumer interest in [the reverse mortgage] product is likely to increase significantly, and it will be imperative that older homeowners have access to low-cost and effective reverse mortgage counseling so they can learn about the risks and potential benefits of these mortgage products before they face a financial crisis,” the report states.
Additional home equity conversion tools should also be available, the commission urges policy makers.
“Congress should also promote the development of alternative, low-cost home equity access products, particularly for seniors and family caregivers who face substantial out-of-pocket long-term care expenses.”
Despite the hold placed on the fixed rate standard reverse mortgage product under FHA’s insurance program, other products remain available and additional products will be needed, the report states.
The report was received by housing stakeholders and analysts as a basis for the course of action Congress will need to follow in the coming months and years.
“The commission has established a solid framework on which to build, and we call on Congress and the Obama administration to seize this opportunity to move forward quickly,” said Julia Gordon, Center for American Progress housing expert. “As always, the devil is in the details, and there are many still to be worked out.”
Written by Elizabeth Ecker