An interesting article appeared in MSN Money recently and it includes a lively discussion about the pros and cons of reverse mortgages. The article notes a point made by the Consumer Financial Protection Bureau in its recently released report that older homeowners are increasingly jeopardizing their futures by using these home loans in ways for which the loans were not intended. The article also includes a link to Consumers Union’s call on the CFPB to regulate reverse mortgage lending.
One of the most important points made by the MSN article is the need for potential borrowers to weigh all of their options before choosing a reverse mortgage. Consumers Union agrees. If you’re considering a reverse mortgage, start by getting advice from a HUD certified reverse mortgage counselor, preferably in-person, before taking the plunge. HUD approved counseling is required for every federally insured reverse mortgage, but Consumers Union recommends counseling for all reverse mortgages, not just those that are federally insured. To make sure you have the information you need to make an informed choice, Consumers Union recommends you take your counseling one step further. In addition to any initial counseling you should receive, consult with an Elder Law Attorney, a Certified Financial Planner or a Certified Public Accountant to discuss your options. You may find there are less expensive ways to meet your needs.
Take a look at this Consumer Guide on reverse mortgages published by the CFPB. It’s full of great information and tips.
The CFPB is asking the public to comment on their experience with reverse mortgages to inform the agency’s next steps as it works to protect consumers. You have until August 31 to let the CFPB know what you think, but there’s no reason to wait. You can tell them right now. Be sure you click on the green button that says, “Submit a Formal Comment” to register your thoughts. And while you’re at it, drop us a line at email@example.com. We’d like to hear about your experience as well.