Help for Seniors Who Have Reverse Mortgages

The U.S. Department of Housing and Urban Development created one of the first reverse mortgage products, the federally insured Home Equity Conversion Mortgage.

Although only 1 percent of older households currently have a reverse mortgage, the market for this product has grown sharply in recent years -- increasing from 6,600 loans in 2000 to 107,000 loans in 2007, according to research by AARP's Public Policy Institute.

Still, the high fees scare off many borrowers.

The fees and costs associated with reverse mortgages are often significantly higher than traditional home-loan products -- sometimes as high as 4 to 8 percent of the total loan amount, according to FINRA.

The housing act requires the government to conduct a study to look into the costs associated with reverse mortgages.

For more information about reverse mortgages, try these Web sites:

· AARP's http://www.aarp.org/money/revmort.

· HUD's site at http://www.hud.gov/buying/rvrsmort.cfm.

· The National Reverse Mortgage Lenders Association's reverse mortgage calculator at http://www.reversemortgage.org. The calculator will give you an estimate of the fees you may be charged. Be sure to click on the link for "loan summary" after your calculation.

Many seniors who consider a reverse mortgage do so to cover necessities such as health care, according to AARP. Forty-seven percent of respondents in an AARP survey said they needed the loans to supplement their incomes.

Because so many seniors see no other option than to tap their home's equity to pay for everyday expenses, I'm glad to see the new housing law provides some protections for these homeowners.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and athttp://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail:singletarym@washpost.com.

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