It seems like whenever a good thing comes along, someone bad twists it around and makes trouble out of it. For example, paying your bills online makes your life easier until someone hacks your computer and steals your identity. This same type of problem has come to plague the reverse mortgage loan industry. The reverse mortgage loan can be a terrific way for seniors to access additional spending money but 'bad guys' (predatory reverse mortgage lenders) are causing trouble in the industry.
The Miami Herald recently reported on the problem of predatory lenders. They point out that as more and more seniors have become interested in reverse mortgage loans, more "unscrupulous" lenders have come into the marketplace to take advantage of these seniors. This creates risks for borrowers interested in making use of the reverse mortgage loan in a positive way.
Two solutions to this problem are mentioned in the reverse mortgage warning article. The first is the recommendation that loan counseling be improved to allow seniors to discriminate better between good and bad reverse mortgage lenders. The second is the recommendation that government regulation of reverse mortgage loans be tightened in order to reduce the number of predatory lenders that are out there taking advantage of seniors who could benefit from a good reverse mortgage loan.
In order to reduce your own risk when applying for a reverse mortgage loan, you'll want to make sure that you're working with a credible lender. Seek out advice from a finance professional to assist you in selecting the right loan for your particular financial situation.
Question of the Day: Why do you think it is that predatory people always seem to enter markets and "screw up a good thing"?
