The prevailing reputation for reverse mortgages in our society is not healthy. Stories of elderly abuse, high fees, and financial deceit are wrapped into the memories of many of our nations aging population. However, over the past few years the Department of Housing and Urban Development has significantly overhauled the program by instituting measures that prevent financial abuse and reduces the fee structure on these loans.
Over the past couple years I have studied the reverse mortgage programs and given my financial planning background have recognized that the reverse mortgage could help solve many of forecasted problems with underfunded retirement plans by eliminating a mortgage payment for many Americans in retirement (studies show that today’s baby boomers are entering retirement with more debt and less retirement savings than any other age cohort in our history).
Wade Pfau, a personal financial planning expert who often contributes to the Journal of Financial Planning, wrote a piece back on November 30th for the Wall Street Journal making the case for how the reverse mortgage can help household bridge the financial gaps in retirement. SEE HERE to read the entire piece.
If you have any interest in retirement planning then its worth a read.