Consumer Reports has often criticized reverse mortgages in the past, but in a recent article, the publication has taken a more balanced viewpoint in calling attention to the Home Equity Conversion Mortgage program.
The article focuses on HECM program changes that have occurred in the past three years, highlighting that while these much-needed updates have increased protections for reverse mortgage borrowers, do the potential risks outweigh the reward?
“To be sure, the loans remain a poor choice for some, and at Consumer Reports we believe more reforms are needed,” the article states. “But some experts say that for certain homeowners, with the new regulations in place, it may make sense to consider a reverse mortgage.”
One such expert the article mentions is Robert Merton, the Nobel Prize-winning economist who last fall had some positive messaging for the promise of reverse mortgages and their viability for the millions of middle-class Americans nearing retirement.
“Will we still have problems with reverse mortgages? Of course we will,” Merton says in the article. “Do we need improved design, lower closing costs, and better regulation? Yes. But a well-functioning reverse mortgage is going to be key for the hard working- and middle-class people to have a good retirement.”
Consumer Reports then delves into the “troubled history” of the HECM program as well as the “tougher new rules” that have made reverse mortgages into products that can be used strategically to improve retirement portfolio longevity.
Read the Consumer Reports article.
Written by Jason Oliva