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Tough housing market dashes retirees' reverse-mortgage dreams 2010-03-25 Precipitous declines in home values are limiting retirees' ability to take out reverse mortgage loans, USA Today reports. In an article on the woeful condition of the housing market, the newspaper profiles a couple, Bob and Dawn Riley, who had planned to take out a reverse mortgage in the future. Because their home is in negative equity - meaning that they owe more on their loan than their home is worth - the Rileys may not be able to rely on a reverse mortgage when they had hoped. "I thought whatever we'd have, I'd pass away and leave the house to [Dawn], and she'd have a reverse mortgage to live off of," Bob Riley was quoted as saying. "Now we don't know what we're going to do," he said. Unfortunately for the couple and many other older people, reverse mortgage eligibility is contingent on having a significant equity stake in one's home. If a person's home is underwater (in negative equity), he will be ineligible for a reverse mortgage. And, as USA Today illustrates, it will be years before negative equity turns positive in communities around the country.  |
