Reverse mortgages have become increasingly popular over the years helping many adults, age 62 and older, keep their homes. Columbia Business School professor and reverse mortgage expert, Christopher Mayer, explains why reverse mortgages can help many seniors through retirement debt-free. “You have $3 trillion in housing wealth among older Americans. You have large institutions exiting the market, and more and more elderly with housing debt coming out of the crisis as well as other kinds of debt,” Mayer said. The Federal Housing Administration instated new rules that limit equity borrowers from lump-sum withdrawal, allowing borrowers access to only 60 percent of their equity at closing or during the first year of the loan, protecting seniors from future debt problems. The new rules will also require reverse mortgage borrowers to provide information showing that they can afford to pay insurance and property taxes. Mayer was drawn to the reverse mortgage businesses after the rule changes saying, “those changes all make this a much more attractive business, and the product is a better product.” More here
