Many who hear the term “Reverse Mortgage” begin to immediately list off reason after reason why they are a bad idea. In a video by Professor Chris Mayer, many of the reasons that one might scoff at reverse mortgages are put at ease. Mayer’s experience in the area comes from being a professor of real estate at Columbia Business School. He is not the only one to claim the relevance of reverse mortgages. A task force at a Boston College have stated the positive sides of reverse mortgages, expressing an increasing comfort with the loan. As a extra sign of legitimacy, the Financial Industry Regularity Authority, has removed their warnings against reverse mortgages as a “last resort.”
Many believe that reverse mortgage are too risky for seniors to attempt, when there are other potential risks to their well being. Others find it that it could be taking advantage of the elderly and could cause financial burdens that could otherwise be avoided. Since the market crash in 2008, many steps have been taken to avoid the loss of money from reverse mortgages. Certain companies now require third party consultation before allowing potential reverse mortgagers to take to partake in this loan. Overall, the process of receiving a reverse mortgage has become a much more viable and encouraged option to those are taking the proper precautions. Bloomberg discusses Mayer’s ideas in this recent article.
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