Credit Crunch Skips Reverse Mortgages
April 14th, 2008
Related Stories
- Missing Lines of Credit
- Fair & Balanced
- Which Reverse Mortgage Payment Plan is Right For You?
- Reverse Originations Slow
- How Safe Is Your Reverse Mortgage?
Story Tools
For several months there have been persistent media reports regarding borrowers who have had home equity lines of credit (HELOCs) cut off by lenders — these are credit lines for which borrowers paid fees up-front, lines that in many cases were obtained for use in the event of an emergency need for cash.
As one example, MSNBC has reported that Countrywide suspended further credit advances to 122,000 HELOC borrowers. (See: Home equity loans drying up for some, March 24, 2008.)
The logic behind such suspensions — as discussed here in March — is that lenders are worried about falling equity and do not want to allow further credit advances when property values have declined.
What I have NOT found is a case where a reverse mortgage borrower has had a line of credit suspended or limited.
If it turns out to be true that no reverse mortgage line of credit has been suspended then that would be good news on a number of levels.
First, lenders and HUD would be seen as honoring their commitments.
Second, reverse mortgage lenders would have a legitimate marketplace advantage to promote.
Third, borrowers would have assured access to funds as needed, a significant advantage in today’s financial world.
As in all cases, reverse mortgages should always be considered with care and with the advice of independent professionals, such as attorneys who specialize in elder law.
Related Resources You May Like
RSS Feed
