Re: “Stimulus package drives demand for reverse mortgages,” April 15:
I’m glad to see that the government has considered reverse mortgages in the stimulus package. But still not enough has been done.
This has been one of the biggest rip-offs in the banking business -- and directed at seniors, which is inexcusable.
The biggest problem with the reverse mortgage is not the exceedingly high origination costs, the maintenance costs or the low ceiling on loans, but the fact that there is no fixed interest rate. The approximate rate you quote in your article is 4%, but who knows what the interest rate will be in five or 10 years.
With rates at a historic low, this is an unseemly burden to seniors and their heirs.
San Juan Capistrano