Lowell Deeds

The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell

March 4, 2008

Reverse Mortgages

by @ 12:02 pm. Filed under Real Estate

Sunday’s New York Times had a front page story on the risks involved in reverse mortgages, telling the story of a woman who fell victim to a salesperson who had her withdraw several hundred thousand in the equity of her home and invest it in an annuity that pays her a certain amount of money monthly over an extended period of time. The problem is that the resturn on the annuity was less than the interest rate being paid on the borrowed money, so the woman now only has a very limited flow of monthly income but stands to lose her house in the not too distant future when the borrowed money and the accumulated interest exceed the value of the home. Undoubtedly, reverse mortgages are a useful tool for some elderly home owners who are house-rich and cash-poor, but it’s a not something that has been widely used, at least in this zip code, so everyone is still getting a feel for how they work. We haven’t seen too many reverse mortgages recorded here, but after reading this article, we’ll start paying closer attention to those that do show up.

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