In these times of increasing life expectancies, there certainly is a risk that a reverse mortgagee may find keeping up with rising property taxes an insurmountable burden. In such a case the outcome of forced eviction is contrary to the intended purpose of the reverse mortgage in the first place, namely keeping an aging retiree comfortable at home for life.
With the exit of Wells Fargo and Bank of America, the reverse-mortgage option is disappearing from the market at a time when with some regulatory flexibility HUD may be able to encourage lenders to keep this useful retirement-income-generating product on the market and help reduce the foreclosure risk.
As the market for reverse mortgages is retreating or moving backward at this time, anyone considering a reverse mortgage now will have fewer choices and even more reason to consult a professional financial adviser.
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Donald E. Askey, a Certified Financial Planner™ professional and president of Provident Advisory Group, is a registered fee-only adviser, headquartered in Newburyport. For questions, visit www.providentadvisory.com.