The Reverse Mortgage Is Here To Stay

By Kyle Chezum Updated on 9/25/2013

 

 

The reverse mortgage isn’t going away. Not according to the National Reverse Mortgage Lenders Association, anyway. Wells Fargo announced yesterday that it would be cancelling that line of lending, citing unpredictable home values and restrictions on the loans. Questions quickly arose as to whether this would be the beginning of the end for the reverse mortgage, but the NRMLA reports that ongoing demand for the loans prompted the association to start working with the Department of Housing and Urban Development to develop standard procedures, including ways to evaluate borrower income as well as ways to insure the ability to pay property taxes and insurance.

Reverse mortgages allow homeowners of 62 years of age or more to borrow against equity in their property without requiring them to make monthly payments. The loan is not paid off until the borrower no longer occupies the property as their primary residence.

Wells Fargo reassured consumers that current reverse mortgage borrowers will continue to be serviced, and funds will be made available. The bank also confirmed in a statement that demand is still high for these loans.