The American Association of Retired Persons (AARP) is a large, independent, nonprofit organization dedicated to helping people ages 50-plus to achieve independence—including financial independence.
While the organization, which serves 37 million older Americans and counting, doesn’t offer reverse mortgage products directly, it does weigh in on them in some very important ways.
Here’s where AARP comes into play for retirees who may be looking into getting a reverse mortgage as a means to age in place.
What does AARP think of reverse mortgages?
AARP has expressed support for reverse mortgage products as a tool to help older Americans withdraw their home equity in retirement. While the organization does not actually offer reverse mortgages, it does offer some useful information on this type of loan in the event you are seeking more information from an independent third-party.
On its website, AARP has a section devoted to reverse mortgages, which can be found here.
If you are wondering what the term “non-recourse” means or are preparing for your reverse mortgage counseling session, AARP offers a glossary of reverse mortgage terms as well as a wealth of information and questions to ask yourself if you are considering a reverse mortgage.
AARP influences reverse mortgage policy
In addition to its third-party role in providing information about reverse mortgages, AARP also takes a policy role through its Public Policy Institute. Representatives from AARP often appear during congressional hearings to work with policy makers on reverse mortgage protections and availability.
Through its public policy arm, AARP has also published reverse mortgage reports and studies meant to guide decisions made regarding the federally-insured Home Equity Conversion Mortgage program.
This loan program, which insures reverse mortgages under the Federal Housing Administration, comprises the vast majority of reverse mortgages today and is sensitive to housing policy changes made in Washington D.C.
Click here for a recent AARP Public Policy report on reverse mortgages.
AARP works to protect reverse mortgage borrowers
As the largest senior advocacy group out there, AARP works to ensure that the financial products available to seniors are safe and are in the best interest of those who use them.
Those products include reverse mortgages. In the few cases where reverse mortgage borrowers have not been satisfied with their borrowing experience, AARP has come to the defense of those borrowers.
Most recently, this has taken place in the form of defense for non-borrowing spouses involved in reverse mortgage transactions.
Those non-borrowing spouses who are not on the home title at the time of the loan closing are not entitled to inherit the home once the borrowing spouse has passed away or moved from the home under policy set by the FHA.
Another recent example involved AARP’s urging the Federal Housing Administration to clarify the reverse mortgage “non-recourse” policy.
At AARP’s urging, FHA clarified that any non-borrowing spouse is allowed to purchase the home for fair market value in the case where a borrowing spouse passes away or leaves the home.
This important protection means that a reverse mortgage heir never has to repay more on the loan than the home is worth at the time of the home sale.
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