Seniors Tap Into Equity

Reverse mortgages expected to surge as baby boomers age

Sue Kirchhoff
USA Today
Aug. 12, 2007 12:00 AM

WASHINGTON - Even in the midst of a housing recession, one segment of the mortgage market has been booming: reverse mortgages, which provide a line of credit or monthly payments to seniors 62 or older, using an existing home as collateral.

Reverse mortgages rose more than 9.5 percent on a dollar basis in the second half of 2006, compared with the first six months of the year, while the number of loans was up 19 percent, the Mortgage Bankers Association says. The Federal Housing Administration, which insures about 90 percent of reverse mortgages, announced a 105 percent jump in the loans from 2000 to 2006.

More than 76,000 senior citizens got a federally insured loan in 2006, up from 6,637 in 2000. Lenders may top the 2006 total by the end of this summer.

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