Reverse mortgage products are championed due to their diverse products that help them meet the needs of special cases. However, Urban Institute VP of Housing Policy Laurie Goodman, believes that this could work against the Home Equity Mortgage Conversion products, according to Reverse Mortgage Daily.
"I can do a fixed- or adjustable-rate, I can do a lump-sum distribution, line of credit, term annuity, tenure annuity or a combination of payment options. And, I can determine the timing and pace at which the funds can be withdrawn," said Goodman, according to the report.
With this many options, Goodman believes that borrowers could become confused, ultimately leading to a loss of a sale and a negative effect on the reverse mortgages as a business.
Those in the reverse mortgage industry argue that the range of options helps to broaden the reach of the product and actually acts as a way to help the customer, rather than harm them.
"That necessary flexibility expands the tools available for originators to solve their clients’ particular financial issues, according to Laurie MacNaughton, reverse mortgage consultant at Atlantic Coast Mortgage just outside Washington, D.C." according to the RMD report.
"In my kitchen is a blender, a mixer, a food processor, and a knife set. Each has cutting blades and their basic function is to make food smaller. Yet, I would not use my blender to bone a chicken, nor would I use my knives to beat whipping cream; for a good outcome the nuances of the tool must fit the task."
For a further breakdown of the debate as to whether or not reverse mortgages offer too many options for borrowers, click here.