We have all seen the ads on television where celebrity spokesmen tout the benefits of reverse mortgages for those individuals who are 62 or older and own their homes. These mortgages are supposedly free money as they allow the owner to borrow against the value of their home and not have to pay the money back until they move or die. The spokesmen tell us that the money can be used for vacations and other fun things. What they do not tell the viewer is that there are fees associated with those mortgages which if not paid can lead to eviction.
The New York Times today reports that the new Consumer Financial Protection Bureau is preparing new rules to help regulate those mortgages. According to the Times, there are more than 750,000 such loans outstanding. See "Loan Lifeline for Retirees is Taking Toll,"
www.nytimes.com.
If you have a reverse mortgage now or are considering obtaining one, take a look at this article as soon as possible. And remember, "there is no such thing as a free lunch."
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