Reverse mortgages can provide access to home equity for cash-poor seniors, but critics suggest that the true cost of these loans is high, and that borrowers forced to move for health or other reasons may find the reverse mortgage to be a problem. The Commission recommends regulation, including disclosure requirements to insure that consumers are fully informed about the effects of reverse mortgages.
Reverse mortgages allow seniors to use equity in their homes while remaining in the home. The interest is allowed to accumulate, and is paid off when the person dies or leaves the home. There are various benefits and drawbacks to reverse mortgages. The Commission looks to regulation of these loans, including the need for full disclosure and independent advice and counselling.