Reverse-Mortgage Outcry: Another Circular Firing Squad – Nom de Plumber’s Thought of the Day

ndp  Nom de Plumber is a Nom de Plume.

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 http://www.nytimes.com/2012/10/15/business/reverse-mortgages-costing-some-seniors-their-homes.html?pagewanted=all
 
Read the complaints of both borrowers and comment posters, who rail against reverse-mortgage lenders. They demand US government regulation…..not realizing that the major lender is not the rapacious private sector, but the US government itself, courtesy of we taxpayers. 

Private lenders largely refuse to originate reverse mortgages, as federal lending laws forbid underwriting them on repayment capability.   No private institution would rationally lend money without the right to assess beforehand if borrowers can repay.   So, only public institutions are left to issue reverse mortgages.  

Another example of how US credit policy is just a circular firing squad.

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