Must borrower boost coverage after lender's mistake?
Reverse mortgages are for elderly homeowners who need income and are not concerned with the size of their estate. How the additional income will be used, so long as it is the considered judgment of seniors in full command of their faculties, is totally irrelevant. If, rather than leaving the equity in their homes to heirs, they prefer to fix them up, or take a trip around the world, or raise orchids, it is their call to make. Second-guessing the call is presumptuous, to say the least.
The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
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