Reverse mortgages can be effective tools that allow cash-strapped seniors to leverage the equity in their homes to maintain or enhance their standard of living. Too often, however, the complexity and costs of these vehicles diminish the value that they might provide.
In an effort to help protect seniors who are evaluating a reverse mortgage, the Department of Housing and Urban Development has required lenders to provide counseling to every proposed borrower prior to consummating the loan. Unfortunately, the budget deal just reached between Congress and President Obama has cut-out the funding for the counseling program. Unless the money miraculously reappears, reverse mortgage counseling will end as of October 1, 2011.