In these troubled economic times, many older people must find a source of money. Taking out a reverse mortgage, if there's sufficient equity in the house, may seem (or may have seemed in the past year or so) a good idea. The New York Times today explains why many elderly people are losing their homes after the death of a spouse as a result.
"HUD sets the rules for these loans and insures them as well. For years, most borrowers and lenders read HUD’s rules to mean that a borrower or the heirs would never owe more than the loan balance or the value of the property, whichever was less. This is all well and good for couples who are both on the mortgage. Even if one of them dies, the other can stay in the home and keep drawing on any remaining money from the reverse mortgage until he or she no longer lives there.