Ron Lieber, in his NY Times column, Your Money, writes about Reverse Mortgages.  Among other things, Mr. Lieber notes that this summer, BNY Mellon got back into the business as a servicer and securitizer of the loans. In addition several respectable researchers have endorsed certain uses of reverse mortgages, and a series of legal and regulatory changes intended to lower the number of defaults have also taken effect or are about to.

Mr. Lieber also notes that many of the people entering or examining the reverse mortgage business now describe their interest in it as a sort of conversion. Even half a decade ago, Michael Gordon, BNY Mellon’s head of retirement and strategic solutions, would never have suggested that the company come near the product. Companies considering a potential customer generally did not check to make sure that the borrower would be able to afford property taxes and home insurance payments. They also did not disqualify many borrowers for whom the loan was simply not suitable.

Mr. Gordon is quick to note that the product is not right for everyone. But he also thinks that many retirees with investment portfolios that are half in stocks and half in bonds are unaware of their true asset allocation. After all, their home equity is an asset too. Many people have an awful lot of it, and those who bought retirement homes in 2005 know all too well how much of it can disappear.

To read more, see Love Them or Loathe Them, Reverse Mortgages Have a Place – NYTimes.com.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.