Home owners who are 62 and older can apply for what is called a ‘reverse mortgage.’ Reversed mortgages have been around for several years now and thousands have applied and received reverse mortgages on their homes. A reverse mortgage is designed for people who are 62 or older to borrow equity in their homes and then receive monthly payments until they move or die. There are no monthly payments, but the property taxes, insurance and any maintenance costs all have to be paid, and paid on time. Many see this as a good retirement income.
According to the National Association of Realtors, defaults on these loans are now hitting all time records and are also being blamed for many senior citizens loosing their homes. With the increase of defauolts, the Consumer Financial Protection Bureau is now working on new rules for improving the disclosure of these reverse mortgages and the hidden risks, as well as better overall supervision of the lenders who issue these loans.