Full Citation

Title: Can "High Costs" Explain Limited Demand for Home Equity Conversion Mortgages?

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: Reverse mortgages o er holder homeowners, many of whom are \house-rich and cash-poor," enhanced liquidity and insurance against extreme longevity and severe home price declines. That most older homeowners decline to use reverse mortgages (or other mortgage debt) is commonly blamed on high fees and interest rates. Around the recent home price cycle peak, strategic use of the most popular US reverse mortgage HECM line of credit would have generated a positive risk-neutral expected value for owners with plausibly optimistic expectations about price growth and interest rate movements.

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Authors: Davidoff, Thomas

Publisher: University of British Columbia

Data Collections: IPUMS USA

Topics: Housing and Segregation, Other

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