Since August we have been writing about reverse mortgages as a foreclosure prevention tool for a limited number of distressed borrowers — those aged 62 and above with significant equity who want to dump toxic loans. The idea is basically to refinance an exploding ARM with a nice, friendly reverse mortgage that requires no monthly payments, ever.

Now other folks have begun to catch on….

“While no one tracks subprime mortgage holders by age,” says The Wall Street Journal, “the approximately 30 million Americans 65 and older who own their homes are routinely targeted by subprime lenders with refinancing deals, borrower advocates say. Given that the rescue plan recently proposed by the Bush administration and the mortgage industry doesn’t provide relief for individuals who can’t afford their current loan terms, reverse mortgages are currently one of the few tools available to help older homeowners facing foreclosure.” (See: A Way for Older Homeowners To Back Out of a Bind, December 26, 2007)

The problem, of course, is that relatively few people with troubled loans qualify for reverse or HECM mortgages. The problems typically age (too young) and equity (too little).

But for the limited number who do qualify, a reverse mortgage can be just the right loan product to get out of the financial jam of a lifetime.

This entry was posted on Sunday, December 30th, 2007 at 2:58 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.