Savings & Pensions

New York Times - Tapping Into Homes Can Be Pitfall for the Elderly

Erika Baker was 67 years old, divorced and worried about her job when a saleswoman showed up at her door in late 2006.

A reverse mortgage, the saleswoman explained, would give Ms. Baker instant access to hundreds of thousands of dollars tied up in the value of her home. Such a loan, typically available only to homeowners in their 60s and older, would not have to be repaid until Ms. Baker moved out, the saleswoman said.

And if she never moved, the loan would be settled by selling her house after she died. “Your Home Pays You Cash!” read a brochure the saleswoman left behind.