Chicago Tribune: Reverse Mortgages Becoming Better Options for Seniors

A columnist writing for the Chicago Tribune changed his tune on reverse mortgages in a piece this week that explored how these loans can offer retirees benefits that other financing alternatives cannot.

Elliot Raphaelson of the Tribune Content Agency specifically touched on the line of credit feature as one of the “more important potential advantages” of reverse mortgages, citing the new book from industry veteran Shelley Giordano as the basis for the views set forth throughout the column.

Giordano, who is principal reverse mortgage consulting firm Longevity View Associates, and also chair of the Funding Longevity Task Force, describes various facets of the reverse mortgage product in her book, “What’s the Deal with Reverse Mortgages?”

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Covered topics include options such as fixed versus variable loans, the nuances of credit lines, mortgage fees, as well as the merits of home equity lines of credit (HELOCs) vs. Home Equity Conversion Mortgages.

“In my opinion, if you intend to maintain a line of credit for a long period of time, then the HECM has significant advantages over the HELOC, if you can obtain a HECM with very low (or no) closing costs,” Raphaelson writes. 

Raphaelson also discusses updates to the non-borrowing spouse policy that allow the widow/widower to remain living in the home following the death of their borrowing spouse, and also, vaguely, the terms and reasons for the Financial Assessment. 

Read the Chicago Tribune column.

Written by Jason Oliva

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  • This is one of the strangest statements written about HECMs in recent memory: “However, the Reverse Mortgage Stabilization Act of 2013 introduced more customer safeguards.”

    RMSA gave the Secretary of HUD the administrative authority to “establish, by notice or mortgagee letter, any additional or alternative requirements that the Secretary, in the Secretary’s discretion, determines are necessary to improve the fiscal safety and soundness of the program authorized by this section, which requirements shall take effect upon issuance.”

    What RMSA gives the HUD Secretary is the right to improve the fiscal safety and soundness of the program not add customer safeguards unless those safeguards also “improve the fiscal safety and soundness of the program.”

    Again a reporter writes something positive about HECMs but fails to comprehend and recite the facts.

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