Patti's Comments: Two sides to this story!
Excerpt from The Washington Post: (click for entire article)
The Department of Housing and Urban Development has left elderly borrowers vulnerable to abusive lending practices because of shortcomings in programs that offer reverse mortgages, according to a report released yesterday by the Government Accountability Office.
Reverse mortgages, which are usually backed by HUD's Federal Housing Administration, enable seniors to withdraw equity from their homes. The loan and the accumulated interest do not have to be paid back until the owner dies or sells the home. But the upfront costs are substantial.
While these loans have become more attractive to seniors as the economy has soured and housing values have dropped, reverse mortgages are complex. That is why the FHA has long required that the seniors take part in HUD-approved counseling sessions before these loans are processed. Yesterday's report concluded that HUD "lacks effective controls" over the counseling programs.
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