Are we actually learning from history?
by Tom on June 8, 2009
in Market Musings, banks
I’m not writing this to get into the details of whether or when reverse mortgages are good or not. That’s not what I found interesting about this article. What did I find interesting?
The Federal government says that they see similarities between subprime mortgages and reverse mortgages and they want to make sure reverse mortgages aren’t getting out of hand like the subprime stuff did.
Are we actually learning from history?
What do you think?
Tom Vanderwell
US regulator sounds alarm about reverse mortgages – Jun. 8, 2009
Dugan, who heads the Office of the Comptroller of the Currency and supervises some of the nation’s largest banks, said regulators are crafting guidelines to ensure that robust consumer protections are in place for reverse mortgages.“While reverse mortgages can provide real benefits, they also have some of the same characteristics as the riskiest types of subprime mortgages — and that should set off alarm bells,” Dugan said in prepared remarks to an American Bankers Association conference.
Dugan said that as the elderly American population grows, there could be a significant pickup in demand for proprietary reverse mortgages, which he said bear significant similarities to the type of subprime products that helped fuel the housing boom and bust, resulting in a widespread credit crisis and recession.
