Using reverse mortgages to help soften the blow of so-called “silver divorce” has gained momentum as a potential strategy in recent years — and now a nationally syndicated columnist has weighed in.
Benny L. Kass, a lawyer who pens a regular real estate column that appears in the Washington Post, Chicago Tribune, and other papers, explored a fictional scenario involving a divorcing couple in their 70s. The husband wants to move out of the home, and the wife intends to stay, but the $600,000 property still has a $200,000 mortgage.
“This is a very common problem throughout the country,” Kass wrote. “With the divorce rate increasing among seniors (the ‘silver’ divorce), too many couples seeking a divorce either have to sell the family home, or the spouse who will not remain in the property is unable to buy something else.”
The incidence of older Americans divorcing is indeed on the upswing: The breakup rate for married Americans aged 65 and older tripled between 1990 and 2015, according to a 2017 survey from the Pew Research Center.
Kass proposes a kind of “double reverse” solution for the fictional pair: The wife can take out a reverse mortgage on the property and receive about $286,000, with $200,000 going toward paying down the existing mortgage on the home — and the remaining $86,000 helping form the husband’s down payment on a Home Equity Conversion Mortgage for Purchase transaction on his new condo.
“If Sam and Sara both qualify for their HECM, Sara will stay in the family home, Sam will have his own condo, and neither will be obligated to pay any mortgage so long as they continue to reside in their respective properties,” Kass concludes.
The columnist also advised anyone interested in exploring such a solution to consult their attorneys and financial counselors. Kass additionally directed readers to explore reverse mortgage resources developed by the Department of Housing and Urban Development, AARP, and the Federal Trade Commission before making a firm decision.
Read Kass’s full column at the Washington Post.
Written by Alex Spanko