There is a problem in reverse mortgage loans that may soon have to be addressed. An increasing number of the homes being taken back by lenders after the borrower moves or dies are in poor condition. There are many theories as to the reasons, but the main one is fairly obvious. Once a borrower believes that his or her home will have no equity, the pride of ownership is lost. Why spend the money to make repairs or repaint? Unless there is an emergency repair needed, you are fixing up someone else’s home.
Currently, it is not common for lenders to make inspections or have maintenance agreements specifically for reverse mortgage borrowers, but it may come to that. Reverse mortgages are relatively new. As the baby boomers hit age 62, there will be a dramatic increase in the number of these loans. The maintenance problem will become more serious. If you are getting a reverse mortgage loan, ask your counselor if there are any new maintenance requirements.