[There hasn't been much news - good or bad - about the reverse mortgage business or, if there has been, it hasn't crossed my computer screen. In one of the very few consumer lending growth sectors for banks - where the fees are high and the alternatives for seniors are few - it seems that banks are going about their business in loaning more and more money to the dwindling numbers of homeowners that still have equity (and high medical bills). From June 25th, 2007 comes this look at the business of reverse mortgages.]
Cash-strapped seniors are now “sitting on vast amounts of untapped equity” and something has got to be done about it!
Enter legions of helpful bankers and Wall Street firms anxious to help facilitate the equity extraction for upwards of four percent before the homeowner sees a penny, all in the name of perpetuating an economic model that looks more and more like Bizarro World.
As the subprime debacle shows no sign of slowing down and credit begins to tighten for traditional mortgage products (a few years too late), the banking industry has set its sights on the next hot growth sector – reverse mortgages.