Money promised for tighter reverse mortgage standards
The Government is promising money to develop tighter standards for home equity release schemes – often called reverse mortgages.
Under such schemes people can release the equity from their house, either as a lump sum, or in regular payments.
The schemes are usually used by asset rich, cash poor, elderly to enhance their lifestyle.
Prime Minister Helen Clark said $258,000 over two years would be included in this year's budget for the Office for Senior Citizens to develop a code of practice.
"The schemes are a recognised way in which older people can utilise the equity in their home to enjoy a higher standard of living, but the government wants to ensure that proper standards and practices are in place to regulate the schemes," Miss Clark said in a statement.
The code of practice would be negotiated with the insurance industry, which usually ran such schemes, and would cover issues such as disclosure of terms and conditions, risk management practices, and debt recovery.
Source: STUFF
Free Reverse Mortgage Analysis
|
|
