Risk Management In Untested Waters: Many See Reverse Mortgages As The Next Big Loan Product

Risk Management In Untested Waters: Many See Reverse Mortgages As The Next Big Loan Product,

With America’s 78 million baby boomers just around the corner from retirement, the reverse-mortgage market is poised for explosive growth. But so is the market for risk management, because risk–particularly in the form of fraud–always “follows the money.” [??] Because seniors are frequently targeted for financial scams of all kinds, lenders hoping to tap into this lucrative market must begin to incorporate effective risk-management strategies now in order to stay one step ahead of the “perps.” This article briefly examines market demographics and program limitations, and then focuses on identifying and managing fraud risk.

How the program works

The primary advantage of a reverse mortgage is that it allows an owner to access accumulated home equity without having to sell the property or make monthly payments while living on a fixed income. With a longer lifespan, upheaval on Wall Street and the near-certainty of increasing medical costs making them uneasy, many soon-to-be-seniors are justifiably worried that they have not saved enough to live comfortably in their twilight years. Seniors will increasingly see reverse mortgages as a viable way to tap their home equity–currently estimated at $4 trillion, according to Washington, D.C.-based AARP–to close the retirement savings gap.

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Risk Management In Untested Waters: Many See Reverse Mortgages As The Next Big Loan Product

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Written by News & Feeds on June 12th, 2008 with comments disabled.
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