One of the worst things about the reverse mortgage market is that predatory lenders cause a good thing to go bad. The reverse mortgage can be an excellent way for a senior homeowner to receive a monthly income, stay in his or her home after retirement and develop a sense of financial security despite the changing economy as they age. However, predatory lenders may target vulnerable seniors and convince them to get a reverse mortgage that doesn't have the terms which are right for them.
This predatory lending is in the process of being terminated or reduced through actions that the federal government is taking to protect America's seniors. However, as fast as the government can put protective measures in place, organizations are finding ways to do reverse mortgage harm. For example, a new press release from a group that sells direct marketing lists has explicitly stated that they include reverse mortgage prospects on their lists. In other words, a predatory lender could use this company's direct mailing to contact seniors who would be likely to consider a bad reverse mortgage loan.
The key here is for reverse mortgage borrowers to protect themselves. Don't respond to lenders who are seeking you out and asking if you want a loan. If you're ready to get a loan, you should be the one seeking out the lender - not the other way around. Consider all of your choices carefully and work with a finance professional to make sure that you're choosing a reverse mortgage loan that will benefit you for years to come.
Question of the Day: What should be done to improve the benefits of the reverse mortgage market while reducing predatory lending?
