Washington Post contributor Jack Guttentag writes in his latest column that Reverse mortgages are not the next subprime. He adds that:
For reasons not clear to me, reverse mortgages are being bad-mouthed by an unlikely source: consumer groups that are supposed to represent the interest of consumers in general, and seniors in particular.
Pointing out that an AARP survey found that 93% of HECM borrowers said their reverse mortgage had a mostly positive effect on their lives, compared with3% of borrowers who said the effect was mostly negative.
Despite the positive reactions from borrowers, Guttentag writes that some advocates in consumer organizations are bad mouthing the program.
Specifically he addresses the Consumer Reports “investigative report” on reverse mortgages as well as the National Consumer Law Center’s report titled "Subprime Revisited: How Reverse Mortgage Lenders Put Older Homeowners’ Equity at Risk."
He writes that NCLC report is a major source for the “nonsense” claims that growth of the reverse-mortgage market has major similarities to the growth of the subprime market, and could lead to the same kind of "financial fiasco."
