Over the weekend, the New York Times columnist Bob Tedeschi wrote about reverse mortgages and why the Housing and Economic Recovery Act matters to New York area residents. The new laws are intended to give older homeowners access to more of their homes’ equity, provide stricter consumer protection, and, most important for New York-area residents, offer co-op owners the chance to apply for these loans. It’s currently unknown as to when HUD will issue its guidance for co-ops but there has been talk of rules being promulgated by the end of the year.
Reverse mortgages have been available to co-op owners in the past, but only through proprietary products offered by banks and private investors. Because these lenders must bear more risk and have no government insurance against default, interest rates on such mortgages have been significantly higher compared to a Federally Insured Reverse mortgage. To read the article, click here.