The prevailing sentiment remains for many people that the HECM program is a bailout. A life preserver for indigent old folks. Thankfully, professionals who assist older Americans with their financial well- being and quality of life in retirement know better.
There are now mountains of studies and evidence that a reverse mortgage can stave off poverty and the resulting miserable lifestyle that poverty begets if responsibly applied. But today homeowners must meet certain requirements that protect them when they may be better off selling their home. No longer are the requirements 62 or over, some equity in the home and drawing breath sufficient. Irresponsible lending to such borrowers spawned a poor reputation that was certainly earned in some cases. Of course those are the ones that get the publicity. That’s not a bad thing! Some over the top press did serve as the catalyst for changes that serve our seniors far better.
Safer standards and regulations have grabbed the attention and favor of the financial planning community in a big way. There are mountains of evidence about that as well. Applying today’s version of the HECM program is a boon to millionaires, lower asset borrowers and all in between. Please see a great article that makes the point here.