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Reverse Mortgages Popular, But There Are Risks
(November 22, 2005) -- A rising number of older homeowners who've seen their property values soar in recent years are embracing reverse mortgages as a means for financial independence.
Reverse-mortgage borrowers "range from people who are faced with trying to decide whether to spend money at the pharmacy or grocery store, on up to people who want to buy a build-it-yourself airplane kit," says Peter Bell, president of the National Reverse Mortgage Lenders Association.
However, the product does have some disadvantages, including steep closing costs, loan limits, and delays in securing the financing while the borrower waits-sometimes for weeks-to undergo mandatory loan counseling.
The National Foundation for Credit Counseling and Money Management International plan to add approximately 250 counselors to their organizations over the next several months, as they prepare to provide reverse mortgage counseling. The two groups recently received approval from the U.S. Department of Housing and Urban Development to offer the counseling service.
Source: USA Today (11/22/05); Block, Sandra
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