Background of Reverse Mortgages

Reverse Mortage FAQ >>> What is the Background of this Program?

Reverse mortgages were born in the 1980’s. The reverse Mortgage started as a bill sponsored by Michael Fitzpatrick, a Republican Representative from the state of Pennsylvania. This House Bill is aptly named "Reverse Mortgages to Help America's Seniors Act of 2005" In the early days, they were proprietary products offered by both national lenders and local lenders.

In the late 1980’s AARP and the FHA combined to join forces to make these products more uniform, so that senior citizens would be better protected. FHA is a part of the Housing and Urban Development Agency (HUD). In addition, Fannie Mae also plays a vital part in guaranteeing reverse mortgage loans.

The beauty of the FHA reverse mortgage program, is that it guarantees that a loan on a senior citizen’s home, can never be greater than the value of the home……this prevents the home from ever having a negative equity.