Wednesday, January 5, 2011

A Silly Arrangement

This CBS News Money Watch article says people who have reverse mortgages must pay property taxes and homeowner's insurance. Failure to do so results in loss of home, income stream, etc.

If this is true, and I have no reason to believe it is not, one very basic question arises. Why aren't reverse mortgages set up to pay the taxes and insurance first and send the homeowners the balance as their remittance? An arrangement like this is so logical that anything else seems almost criminal.