Trouble Reverse?

June 10th, 2008 | Category: Reverse Mortgage Info

With the housing boom gone bust, lenders are now peddling reverse mortgages to cash-hungry boomers who don’t want to sell in the storm.

Deal-hungry mortgage lenders are targeting aging baby boomers to fuel a spike in reverse mortgages that topped all of 2007’s deals in just the first four months of that year.

Between January and April, 198 humans with incomes by $200,000 took out reverse mortgages-a loan against a home that does not have to be repaid while the borrower lives there-compared to just 164 for all of 2007, according to the area of Housing and Urban Development. Borrowers must be 62 or older, and have equity in their homes.

Some are like John Thompson, C.E.O. of Horizon Resources Group in Atlanta, a consultancy, and his university administrator wife, Dr.

Patricia Sager. Using proceeds from a reverse mortgage on their primary residence as a line of credit, Thompson says he wants “to supply for unexpected emergencies and opportunities,” while expanding his company into England.

But with the credit crunch continuing, leveraged-to-the-hilt homeowners are seeking ways to raise cash without selling their houses during a slump.