Mr. Bell, the president of the National Reverse Mortgage Lenders Association in Washington, D.
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The CFPB concludes that regulations to improve disclosures to reverse mortgage borrowers, and limit misleading advertising.
Senior citizens can also look into asking their families for help before getting a reverse mortgage.
Our original number is based on outdated information from the National Reverse Mortgage Lenders Association's Web site.
For the industry perspective, the National Reverse Mortgage Lenders Association has a most frequently asked questions guide.
"A reverse mortgage feeds into our American desire to avoid the financial facts of life, " Mr. Quinlan wrote.
WSJ: Rethinking Reverse Mortgages, Part 2: Pitfalls and Dangers
States could also require a reverse mortgage so that families actually use up all assets before receiving state help.
That's in part because with a reverse mortgage, the unused portion of the line of credit grows bigger over time.
WSJ: Rethinking Reverse Mortgages, Part 2: Pitfalls and Dangers
Consumers should consider more than closing costs in deciding whether a reverse mortgage works for them, and if so, which type.
Bryan Hopkins, president of Hopkins Wealth Management, says people should exhaust loans from their friends and family before using a reverse mortgage.
First question posed to prospective HECM reverse mortgage shoppers: Is it important to you to leave your home to your heirs without debt?
FORBES: Mortgage Professor Helps Seniors Shop For Reverse Mortgages
Reverse mortgage consumers struggle to understand how interest gets compounded on a loan that does not involve monthly payments on interest and principal.
Instead of doing a reverse mortgage, the man's family took out of a mortgage on the home to get their father some money.
And once a reverse mortgage is taken out, it increases the person's income, which may have a negative impact on Medicare nursing home payments, Holland says.
"A reverse mortgage is an expensive way to enable one to tap an asset of last resort--their home, " says Ron Roge, chief executive officer of R.
Mary Hobbs, 69, is closing on a reverse mortgage with Security One Lending of San Diego for her three-bedroom home in a retirement community in Lincoln, Calif.
Worse, nearly 10 percent of reverse mortgage borrowers were at risk of foreclosure due to non-payment of taxes and insurance as of February, 2012, according to the CFPB report.
FORBES: Reverse Mortgages Fall Short of Their Potential, Says a New Government Report
One alternative to a reverse mortgage is selling the home and moving into a smaller place or an assisted living facility, says Andy Firoved, chief executive officer of Homeowners Toolbox.
One drawback of a fixed-rate reverse mortgage is that you have to draw down the entire loan amount up front and pay interest on the entire amount across the life of the loan.
The CFPB report says that recent changes in the marketplace, including new riskier products with lower upfront costs, are making it tougher for consumers to understand the tradeoffs they face with a reverse mortgage.
Bank of America has been cutting down on its Home Loans business with the recent decision to exit the wholesale lending and reverse mortgage businesses as well as the decision to sell Balboa Insurance.
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The amount of the reverse mortgage loan is also determined by the youngest person who owns the home, so a 70-year-old person who is co-owner of a home would lower the amount her 75-year-old spouse would otherwise get.
So far, the cuts in fees apply mainly to one type of reverse mortgage: the plain-vanilla fixed-rate "home-equity conversion mortgage, " which is backed by the Federal Housing Administration and is paid out to the borrower as a lump sum.
The CFPB admonishes consumers to consider alternatives to a reverse mortgage: refinancing a traditional mortgage, opening a home equity line of credit (or HELOC), applying for property tax credits or property tax deferral programs, downsizing or moving in with relatives.
Guttentag lays it all out for consumers on his Web site, The Mortgage Professor, where he has just launched a reverse mortgage shopping service that walks consumers through the different options for extracting money from their home with a reverse mortgage.
FORBES: Mortgage Professor Helps Seniors Shop For Reverse Mortgages
Ironically, a contributor to this trend appears to be one of the newer, low-cost government-backed reverse-mortgage options.
WSJ: Rethinking Reverse Mortgages, Part 2: Pitfalls and Dangers
Before you start talking to lenders, consider consulting a HUD-certified reverse-mortgage counselor to learn more about the options and mechanics.
As of February, nearly one in 10 reverse-mortgage borrowers were at risk of foreclosure as a result of failing to pay real-estate taxes and insurance.
WSJ: Rethinking Reverse Mortgages, Part 2: Pitfalls and Dangers
Bank of America, for example, is studying "options to address some of the other costs associated with the loans, " says Steve Boland, the bank's reverse-mortgage executive.
You can find a directory of reverse-mortgage counselors at hud.gov.
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