Reverse mortgages are for seniors who don’t have enough spendable income to meet their needs but do have equity in their homes, which they don’t mind depleting for their own use rather than leaving it for their heirs. For reasons not clear to me, reverse mortgages are being badmouthed by an unlikely source: consumer groups who are supposed to represent the interest of consumers in general, and perhaps seniors in particular.
Reverse mortgages have always been a tough sell. Potential clients are elderly, who tend to be cautious, especially in connection with their right to continue living in their home. Fears about losing that right were aggravated by some early reverse mortgage programs, which did allow a lender under certain conditions to force the owner out of his or her house. These are reasons why, until recently, reverse mortgages never caught on.