Get to Know Reverse Mortgagesby Tim Manni
The Office of the Comptroller of the Currency (OCC) recently issued a Consumer Advisory titled “Reverse Mortgages: Are They for You?” The advisory is designed to educate older homeowners on the ins and outs of reverse mortgages and their possible alternatives.
The advisory offers basic facts borrowers should know, the costs and benefits associated with the loan product, as well as some important rules to consider when opting for a reverse mortgage:
This Consumer Advisory, issued by the Office of the Comptroller of the Currency, is designed to help you better understand reverse mortgages. Reverse mortgages are complex loans and are secured by your home. It is important to understand the terms, risks, and costs before you sign a reverse mortgage contract. Make sure to consider alternatives to reverse mortgages.
Reverse mortgages have received quite a bit of ink lately as industry professionals and Federal officials have stepped up efforts to educate senior citizens on their home loan options and shine as much light as possible on unscrupulous lenders who could take advantage of them.
A recent report from the National Consumer Law Center (NCLC) warns that the reverse mortgage industry could very soon become the new subprime. The report claims that former subprime lenders have altered their business model in order to cater to reverse mortgages instead. While the products are very different in their makeup, the NCLC says the ways in which subprime and reverse lenders attract customers may be the same.