In the past, reverse mortgages seemed a little shady, with many credit unions shying away from the loans hawked by geriatric stars on late-night TV. However, Ocwen Financial Corp. has projected that the reverse mortgage market could total $2 trillion over the next five years, easily trumping the estimated $90 billion that it is worth now.
The growth reflects the estimated 77 million baby boomers closing in on retirement age and their potential interest in reverse mortgages. About 10,000 boomers reach the age of 65 every day in the U.S., and about 48% of them lack the necessary funds to retire.
Mortgage Finance magazine reported that in 2014, U.S. homeowners took out over $15 billion in reverse mortgages, which represents a 20% increase from 2012, but is still short of the record $30 billion in reverse mortgage loans in 2009. But financial advisors are optimistic about the growth in reverse mortgages, especially with new laws in place to protect homeowners.
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