BPC Commission on Retirement Security and Personal Savings
Here is the last portion of the article that shares the purpose and concerns of the Policy Center’s new Health and Housing Task Force. In conclusion it discusses the merits of using money from a Reverse loan to create financial stability for a senior and allow them to remain in the home.
Housing Task Force Sees Merits of Reverse Mortgages – By Jason Oliva – March 30, 2015
“A reverse mortgage is a useful tool to generate capital that people have stocked up over a lifetime in the equity of their home, but it has implications,” Cisneros said. “There are serious things to think about, but it is a tool that deserves a place if properly utilized.”
In a previous report  from February 2013, the BPC touched on the topic of reverse mortgages, urging steps be taken to ensure consumers understand the mechanics of these loans, including their benefits and potential risks.
Though it is unclear if the Task Force will target reverse mortgage policy recommendations, the BPC’s Commission on Retirement Security and Personal Savings is looking into the topic of reverse mortgages in a report which is slated for release this sometime this Fall.
“It [reverse mortgage] is a toll in the toolbox,” said former Senator and HUD Secretary Mel Martinez, on contribution of reverse mortgages for aging in place. “As with any other financial tool, there always needs to be a fit for the need as opposed to the opportunity. Good consumer financial empowerment is paramount in any financial transaction.”
Building on the work of the BPC’s Housing Commission, and simultaneously with its Long-Term Care Initiative, the Health and Housing Task Force plans to seek cost-efficient ways to meet the health and housing needs of the burgeoning senior population.
Among its goals will be finding cost-effective ways to modify homes and communities to make independent living viable for senors and identify barriers to home and community-based services.”
Housing Crisis in the Coming Years
I am going to share the next section of the article that discusses the concerns of a new Housing Task Force that will try to determine where the risks and the solutions are for an aging population. And Reverse loans are part of that discussion.
Housing Task Force Sees Merits of Reverse Mortgages – Posted by Jason Oliva on March 30, 2015
“While various reports cite seniors’ unwavering desire to remain in their homes for as long as humanly possible, their homes are often ill-suited to permit them to do so. It is through this disconnect where reverse mortgages, which have historically touted their ability to facilitate these desire, claim their role in the broader aging in place picture.
“[Reverse mortgages] are appropriate for some people in some circumstances,” said Henry Cisneros, task force member and former secretary of the Department of Housing and Urban
Development (HUD). “We don’t start with the view that reverse mortgages are dangerous for people and should be avoided.”
Cisneros, who has been a proponent  for reverse mortgages in the past, is joined on the Task Force by fellow former HUD Secretary and former U.S. Senator Mel Martinez, and former U.S. Representatives Allyson Schwartz and Vin Weber.
Acknowledging certain people may have been negatively affected by reverse mortgages as a result of bad judgement in the past or influenced by “unscrupulous players,” the commission generally views the loans play a role in helping seniors age in place, but only if used in the right context.”
The remainder of the article discusses the importance of having the correct information about how Reverse loans work and their importance in retirement planning. Rather than being seen as a loan “of last resort”, it’s important for Advisors and the borrower to thoroughly understand the details of the HECM Reverse loan before making any decisions as to whether or not it is an option to age in place.
Housing Task Force
There is growing concern about how to meet the needs of an aging population in the United States in the coming years. Recently a task force was created to address the serious concerns and potential costs to the economy and what methods could possibly be used to minimize the impact in the future.
Reverse loans are part of the discussion and consideration to offset the costs to aging in place. As it stated in the following article, it is not necessarily a solution for everyone, but it is an excellent tool to have has an option.
Seniors currently hold over 3.3 trillion dollars in retained and equity and this money is non-taxable and certainly could be used for long-term-care and other medical expenses and reduce the burden to families and the government.
The article is quite long, so I will post it in three parts for easier reading.
Housing Task Force Sees Merits of Reverse Mortgages
Posted By Jason Oliva On March 30, 2015 @ 6:02 pm In News,Reverse Mortgage | No Comments
“A new bipartisan commission is launching a task force to take aim at critical aging issues over the next year. And for the most part, they are positive about how reverse mortgages factor into the aging in place puzzle.
Acknowledging that the U.S. faces a “real crisis” in meeting the housing and health care needs of its ballooning senior population in coming years, the Bipartisan Policy Center’s new Health and Housing Task Force will embark on a one-year effort to devise policy recommendations focused on enhancing long-term services and supports for the nation’s elderly.
Demographics fuel the Task Force’s establishment, especially as 73 million Americans are projected to be age 65 and older by 2030; with nearly 9 million age 85 and older, the BPC noted in a press call Monday morning. Furthermore, of those reaching age 65, about 70% will require some form of long-term services and supports.
While various reports cite seniors’ unwavering desire to remain in their homes for as long as humanly possible, their homes are often ill-suited to permit them to do so. It is through this disconnect where reverse mortgages, which have historically touted their ability to facilitate these desire, claim their role in the broader aging in place picture.”
The following post will discuss how the use of a Reverse loan in some situations, will be a critical influence in some situations. Not necessarily “all”, but certainly a important component to retirement planning and extending the longevity of a portfolio.