Reverse mortgages - where homeowners 62 and older tap into their home equity - are appealing to many cash-strapped seniors.
Instead of paying a monthly mortgage payment, these seniors "reverse" their home loan and pull out their equity, either as a lump sum or in installments. When they move, sell or die, the mortgage balance and accumulated interest must be repaid.
But a new report by the Consumer Financial Protection Bureau says reverse mortgages are becoming more risky.
Among its key findings: Reverse mortgages are more complex and harder to understand than in the past; more seniors are taking lump sum payments, making them vulnerable to investment losses and financial scams; mandatory counseling needs to be beefed up, including for spouses.
Have you done a reverse mortgage? We'd like to hear your thoughts on how it's helped or hurt your finances. Contact me at (916) 321-1968 or email@example.com