National Reverse Mortgage Lenders Association: USA TODAY overlooks that foreclosure is often the resolution after borrower passes away


Congress established the Home Equity Conversion Mortgages program in the 1980s to allow seniors to stay in their homes without the burden of a monthly mortgage payment. Since then, more than 1 million seniors have obtained government-insured reverse mortgages to help them meet a variety of financial needs.

The program has evolved over the years, with stronger counseling requirements, enhanced consumer protections, limitations on loan amounts, and nonborrowing spouse provisions. Today, reverse mortgages are an important retirement planning tool.

Reverse mortgages help seniors access their home equity without having to sell, move, or take on a monthly payment. Many older homeowners have little to no savings and rely primarily on Social Security. Furthermore, they may be ineligible for home equity loans and cash-out refinancing because of insufficient income to cover monthly payments or poor credit profiles.

A reverse mortgage loan can be a lifesaver, particularly for those in need of cash with few options, as there are no monthly payments and nominal income requirements. The reverse mortgage enables them to pay off credit card debt, medical bills and other daily expenses. However, as with all property ownership, the owner is responsible for paying taxes.

An important point USA TODAY overlooks is that a foreclosure is often the natural resolution of a reverse mortgage after the borrower passes away. Few result in actual displacement. If the balance due exceeds the home’s value, or there is no next of kin to handle a sale, the estate will simply allow the home to go into foreclosure.

OUR VIEW: Dark side of reverse mortgages hits seniors


Lenders never want to make loans that will default. We’ll continue working with federal regulators and counseling agencies to ensure borrowers and lenders understand the important responsibilities each has in a reverse mortgage transaction.

Peter Bell is the CEO of the National Reverse Mortgage Lenders Association.




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