Archive for February, 2012

Protect Nonborrowing Spouses

Monday, February 20th, 2012

 

When non-borrowing spouses are subject to displacement upon their borrowing spouses’ death, the reputation of reverse mortgage products and the industry suffers. That is why  it is good business for HUD and industry to find creative and humane ways to solve this structural problem.

Reverse mortgages have proven their worth in the lives of older American home-equity-rich homeowners who need extra cash to supplement their retirement income.  In a 2007 AARP-sponsored national survey of actual borrowers, a majority credit reverse mortgages with:

* Giving them peace of mind, 94 percent;

*  Helping them have a more comfortable lifestyle, 89 percent;

*  Giving them improved quality of life, 87 percent, and

*  Helping them remain at home, 79 percent.

It is noteworthy that the study was conducted at a time of presumed and actual excesses in mortgage lending  in this country.

Non-borrowing spouses are influential points of influence in reverse-mortgage borrowing decisions. Because of life-expectancy and demographic realities, they are mostly women, giving the problem a disturbing gender flavor.  Products that are perceived as structurally hostile to non-borrowing spouses who are generally women are  unlikely to enjoy broad support, putting a damper on growth.

Although the Federal District Court for the District of Columbia dismissed Bennett et al v. Donovan last July, it may not be over. The raw human anguish and the legal issues raised in the case are still with us. Read more.

 

 

Copyright (c) 2012, ThinkReverse LLC. All Rights Reserved.