"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.
From CNNMoney.com: U.S. regulator: Be Wary of Reverse Mortgages
Reverse mortgages could be the next subprime mortgage product to experience rapid growth while taking advantage of a vulnerable segment of the population, top U.S. bank regulator John Dugan said Monday.
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.
Reverse mortgages are complicated loans targeted at homeowners who are at least 62 years old, and allow older Americans to live off the equity in their homes as they age.
In a reverse mortgage, the homeowner receives the money from the lender, which does not have to be repaid as long as the borrower lives in home.
As with any loan be sure to do your home work. Know what you are getting into and remember you sign a contract when taking out loan. You may putting your home and your lively hood at risk. if you don't understand the loan terms. Just know the facts and make an educated decision.
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