dangers of reverse mortgages

The first post I do should give you a little history of reverse mortgages. Most people have just starting hearing of reverse mortgages and think they are a very new product. That is untrue. They have been around for a while but have not become popular till the government started regulating them. Here is a very brief and basic history of the reverse mortgage.

Reverse mortgages have been around since 1961 when Nelson Haynes of Deering Savings and Loan gave a reverse mortgage to Nellie Young, the widow of his high school football coach. Then in 1963 the first property tax deferral program was offered in Oregon and was considered a reverse mortgage. in 1977 the first reverse mortgage program was offered by Arlo Smith of Broadview Savings and loan and was called "Equi-Pay". In 1977 Wisconsin offered the first statewide deferred payment loan program through WI Dept. of local Affairs. In 1979 the first national” reverse Mortgage Development Conference" was sponsored by WI Bureau on Aging in Madison, WI. In 1986 AARP gets involved heavily in Reverse Mortgages and urges enactment of federal insurance for reverse mortgages. President Reagan signed the legislation to allow HUD to insure them in 1988 on their Home Equity Conversion Mortgage (HECM). It wasn't till the early 90's that these mortgages started to be used by seniors. So why the sudden stir and what makes this mortgage so unique? The baby boomer population that we’ve all been hearing that is about to start retiring, begins to do so as of January 1, 2008. What this means is that America will have an unprecedented number of people retiring with many having their main asset being their homes. Gone are the days of the American worker working to the age of 62, retiring with a pension and social security, and then passing by age 70. People are living longer and fewer are retiring with adequate income provided to meet their life needs. The huge appreciation most properties have experienced allows seniors an avenue to augment this growing need for income.

any questions please call me at 262-641-5451 and ask for David