Reverse Mortgages Still Under Fire

\r\nMost people would agree that receiving information prior to obtaining a mortgage is a good idea. But when it comes to reverse mortgages, a new law requiring some areas to adhere to strict guidelines may be the equivalent of killing the opportunity to obtain one. In areas of Chicago, borrowers are required to go through financial counseling prior to obtaining their mortgage. In an area that is predominantly lower income, the law may prohibit many prospective buyers from getting the mortgage they need.\r\n

Critics are calling the law a form of redlining, meaning that based on income and credit score, people are being discriminated against. They state that it is not fair practice to require one group of people to obtain credit counseling prior to obtaining a mortgage, but not other people. While the law is still a pilot, and was enacted to protect some homebuyers from predatory lending, it has come under fire from many different parties. The pilot will be re-evaluated in four years, and will most likely result in changes made to the law, or throwing it out all together.\r\n