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November 26, 2008

Reverse mortgages - the next subprime crisis?

Does anybody besides me think we should be at least a little bit worried about a change in financial law next year that will let reverse mortgage holders use these mortgages to buy new homes?
"This provision could really transform the industry," says Peter Bell, president of the National Reverse Mortgage Lenders Association, in Washington, D.C.

No shit, Sherlock.

I'm picturing thousands of seniors getting inundated with fliers for subprime mortgages. As the story points out, it's not as if financial sharpies haven't already targeted reverse mortgage holders for a variety of financial scams, high-pressure investment pitches, etc.

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