Reverse Mortgage loans have always had a bit of a bad rap according to regulators, like the Consumer Financial Protection Bureau. According to the CFPB, these loans had a propensity to tempt senior citizens into leveraging the equity of their home, in order to get some easy access to large amounts of money, only to end up facing severe problems when the money ran out due to uncontrolled spending. However, with the introduction of many new laws to regulate any such spending, this service has become a veritable goldmine to some people, like Christopher Mayer, a professor in the Columbia Business School, who is the chief executive of a startup which provides these reverse mortgage loans.
According to Professor Mayer, reverse mortgage loans, if managed effectively, are a very responsible way to make the right kind of financial plan for your retirement. According to him, there is a huge market for this service which is not being effectively served. Since many people openly rely on plans, like their 401(k), for their expenses after retirement despite its instability, there is a great deal of market potential for reverse mortgage loans. These offer senior citizens, who own their home and are over the age of 62, a federally insured method of leveraging the equity of their home in return for financial assistance, all the while keeping possession of their property; thus giving them the financial and mental security which is so important to them.