Reverse Mortgage Guide

There are those who favor reverse mortgages and those who don’t. The debates they have are useful and help people better understand how such financing works.

John Gosselin, a Massachusetts attorney who deals in elder law, offers the case for reverse mortgages on his Gosselin Law Blog.

Gosselin suggests that one reason for reluctant public acceptance of reverse mortgages was initial misunderstanding of the product:

“Reverse mortgage lenders, the elder law bar and the public did not get off on the right foot when reverse mortgages became generally available,” says Gosselin. “There were many confusing features to the initial loans and the government and banks did little to help borrowers understand their transactions. Reverse mortgages became known as the estate planning tool of last resort for truly financially needy elders. The elder law bar was hesitant to recommend reverse mortgages, estate planning lawyers put their heads in the sand and real estate lawyers, at least many of the real estate lawyers in Massachusetts that my law firm deals with, were completely in the dark on the workings and benefits of reverse mortgages. So what has changed? In a word, education. The reverse mortgage industry made it their mission to educate the market place, not only consumers but also lenders about the powerful benefits of reverse mortgages.”

I suspect the problem at first was actually different. When reverse mortgages were first introduced the concept was new and some formats included unattractive features. We now have HECM loans from FHA that help borrowers avoid many of the early abuses.

Reverse mortgages are a small but growing mortgage specialty that will become larger as the population ages and as the products offered to the public improve. While reverse mortgages are not for everyone, they have value for selected borrowers, especially those who receive full and independent information.

Borrowers are typically well served by working with an attorney who specializes in elder law because they can get reverse mortgage information as well as proper legal advice for the wills and living wills they also need.

Gosselin makes good points and his blog is worth reading in full.

This entry was posted on Thursday, June 14th, 2007 at 3:46 am 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.