SENIORS BEWARE: Not all reverse mortgages are created equal!

SENIORS BEWARE!

Not all reverse mortgages are created equal.

Federal banking regulators are concerned about reverse mortgages and related consumer protection issues.

Reverse mortgages are loans for borrowers over 62 years of age who can live off the equity they have in their homes as they get older.  There are no monthly payments for the borrower.  They are borrowing their equity.  After they die the home becomes the property of the bank.

Most reverse mortgages are insured by the Federal Housing Administration.  However, there are new products on the market that are “proprietary.”  These products offer the consumer less protection.

Concerned that the “proprietary” reverse mortgages have the earmarks of the subprime mortgages that were a major cause of the mortgage “melt down”, they are working to develop regulations to eliminate misleading marketing.

If you are considering a reverse mortgage make sure that the product you select is federally insured.

For more information select this link:

http://www.money.cnn.com/2009/06/08/real_estate/reverse_mortgages.reut/index?postversion=2009060813