Remarks by John C. Dugan, Comptroller of the Currency, Before the
American Bankers Association Regulatory Compliance Conference, Orlando, Florida, June 8, 2009 – Consumer Protections for Reverse Mortgages
“….reverse mortgages are targeted at older homeowners that have built up substantial home equity. Like traditional mortgages, a reverse mortgage provides a homeowner with access to cash secured by his or her home. But unlike a traditional mortgage, a reverse mortgage does not require the borrower to make payments on an ongoing basis. Instead, the home itself is the primary source of repayment, and no such repayment is required until the homeowner dies, permanently moves out of the home, or fails to maintain the property or pay property taxes or insurance. In addition, the loan is usually non-recourse, with the amount the borrower owes at repayment generally capped at the value of the home. In these unique circumstances, the borrower has no need to demonstrate income capacity or a creditworthy FICO score to qualify for a reverse mortgage, because the loan is underwritten based on the value of the collateral and the life expectancy of the borrower.”
Related postings on financial system
Sorry, comments are closed for this post.