One of the major concerns that people have regarding the prevalence of the reverse mortgage loan among seniors today is that these seniors are going to be taken advantage of by predatory lenders who want to close the reverse mortgage deal at all costs. This is a concern in all countries where the reverse mortgage is an option and each of these countries are doing different things to try to keep their seniors safe.
New Zealand has just entered the market of trying to keep reverse mortgages safe by releasing a "code of practice" for reverse mortgage arrangements that take place there. The code of practice establishes a guideline of basic principles which should be followed during reverse mortgage arrangements - principles such as making sure seniors are fully informed and understand the transaction and that the reverse mortgage loan can't exceed the total amount of home value.
The code of practice is currently a voluntary code that reverse mortgage lenders can choose to follow if they desire. It may become mandatory in the future. This is beneficial to assisting seniors in choosing the lenders that are going to be the most honest in their reverse mortgage transactions and is one method countries may use to keep their seniors safe.
Question of the Day: Which country has the best practices regarding reverse mortgages in terms of keeping seniors safe?
