Reverse Mortgage Regulationsreverse mortgage regulations
The share of borrower has more than more than doubled since the 90s to 47 per cent in the 60s. "Since reverse mortgage loans can help older house owners reduce the burden of retiring, this innovative mortgage credit line can be advantageous if older people select it on the basis of a sound knowledge of how it works," said Richard Cordray, executive director of the CPA.
The Congress instructed the Consumer Finance Protection Bureau to investigate the reverse mortgage markets as part of the 2010 Dodd-Frank Finance Supervision Act, which also set up the still contentious Watchdog agency. Finally, the survey could result in new regulations for the reverse mortgage markets. As Cordray said, the loan can offer a revenue stream to help older folks stay in their houses.
Borrower are liable for real estate tax and household contents insurances, but may postpone payment of loans while still living in the home. However, the survey found that nearly half of reverse mortgage debtors in 2011 were under 70 years of age and that more than 70 per cent of individuals had withdrawn all available resources at once instead of receiving periodic payment or using the resources as a line of credit. However, the survey also showed that the majority of reverse mortgage debtors were under 70 years of age.
Both of these tendencies increase the chance that borrowers will run out of cash or face foreclosure later imminent, the agency said. Nearly 10 per cent of reverse mortgage debtors in February 2012 were in danger of loosing their houses through enforcement. Deceptive publicity about the product and insufficient advice for prospective buyers could also cause individuals to unwittingly get into bad credit, the firm said.
"In order to save humans from the abuse of reverse mortgage loans, we need to enlighten and enlighten not only older Americans, but also the janitor generation," Cordray said. It has set up an inter-active instrument on its website to respond to queries about finance issues, such as reverse mortgage lending, and will consider further rules and enforcement measures to avoid misleading publicity and other issues, the reports said.