If you are planning on using a reverse mortgage to fund some of your retirement income needs, you may wish to put it in place soon. The economic uncertainty, coupled with a bulge of baby-boomers selling homes, has a long term depressing effect on home values. And what lender wants to be in a reverse mortgage with falling home prices?
A recent NY Times article highlighted the exit of Met Life from the reverse mortgage business.
Yet another household name has given up making reverse mortgages — loans that let borrowers age 62 and older tap the equity in their houses without having to make monthly payments. The lenders get their money back once the borrowers move or die (and their relatives sell the house).
MetLife said recently that it would stop making reverse mortgages, as part of a general exit of the banking industry.
the article continues:
The new prevalence of lesser-known lenders, however, means it is even more important that borrowers do their homework, and complete free or low-cost mandatory counseling before applying for a reverse mortgage, Ms. Stucki said. “We continue to urge people to talk to a H.U.D.-approved reverse-mortgage counselor, before they talk with a lender,” she said. A list of approved counselors is available on H.U.D.’s Web site.