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Reduced fees for reverse mortgages

Wall Street warms to 'once-orphaned' loan type
Published on Jul 29, 2010

The checkered beginnings of reverse mortgages made them a difficult sales proposition to seniors. In the early years, some programs gave the lender a bigger share in the home than the homeowner, the amount of available money that could be tapped was too low, and the fees were too high. Toss in the fact that seniors are wary by nature, often have little to risk, and view paying off the roof over their head as the ultimate measure of success and pride. Now, many of the chuckholes on the road to reverse mortgage acceptability have been filled. If you doubt that, simply check with the investors on Wall Street, who are more than willing to pay a premium to buy these assets, creating a secondary mortgage market for the once-orphaned loans. A reverse mortgage historically has enabled senior homeowners to convert part of the equity in their homes into tax-free funds without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are a...

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