Would-be borrowers still find most home mortgages tough to get in this semifrozen credit environment. A major exception is reverse mortgages for homeowners over age 62. These mortgages represented a growing market for the past decade. Even in recessionary 2009, the number of reverse mortgages grew 4 percent over the previous fiscal year.
Banks, brokers and savings and loans are happy to approve reverse mortgages because the Federal Housing Administration insures them; thus, lenders will be repaid even if the value of the house falls below the balance of the loan. And many consumers find reverse mortgages simpler to qualify for, because eligibility primarily involves borrowers’ age, home value and equity — not their income or credit history.
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