While financial advisers and clients may still be skeptical, reverse mortgages are making a comeback with certain regulators, banks and others who see viable use for these loan products in retirement planning, according to a recent article from Financial Planning.
“Increasingly though, some advisers and some financial advisory firms are starting to view reverse mortgages as an important part of the retirement planning process, particularly since a set of reforms were imposed by the Federal Housing Administration and the Department of Housing and Urban Development in 2013,” the article states.
But while the industry’s largest banks like MetLife (NYSE: MET) and WellsFargo (NYSE: WFC) have since exited the reverse mortgage market, smaller regional banks, smaller regional banks such as Dollar Bank in Pittsburgh and Fulton Bank in Lancaster, Pa., have entered the space in the years following, according to Financial Planning.
On the regulatory front, the article pointed to an update from the Financial Industry Regulatory Authority (FINRA), which in recent years changed its description of reverse mortgages, no longer describing them as “loans of last resort.”
“This past year, though recognizing reforms in the products, such as mandating an independent financial consultation and running a financial assets check on borrowers—requirements that now better protect borrowers from being ousted from their homes—FINRA changed its recommendation,” the article states.
Read more at Financial Planning.
Written by Jason Oliva