SEQUAL approach a winner for reverse mortgage reforms

by Darren Moffatt on August 10, 2011

  • Sumo

The recently announced reforms to reverse mortgages (as part of phase two of the NCCP) are to be applauded.

By mandating that lenders provide a ‘No Negative Equity Guarantee’, all seniors can now feel comfortable that reverse mortgages are safe.  And by also ensuring that intermediaries such as brokers provide better disclosure of the possible financial consequences of entering into these types of contracts (by way of equity projections using recognised reverse mortgage calculators) the government has also helped seniors better assess how accessing credit can reduce their equity in their home and limit their choices in the future.

However, it must be said that members of SEQUAL have been providing these protections and following these processes for years, and have an extremely low customer complaint ratio to show for it. It is a testament to SEQUAL that the government has adopted these ideas.

What these reforms won’t stop however, is a small number of seniors being incorrectly sold a ‘reverse mortgage’ when in fact the loan they are being offered is not a true reverse mortgage, but a ‘line of credit’ or ‘low doc’ that affords none of the protections listed above.

If you are unsure about the loan you have, email me at info@seniorsfirst.com.au

Darren

{ 2 comments… read them below or add one }

Glenda O'Neill November 3, 2011 at 10:48 am

I am 68 & five years ago with my property valued at $340,000 I borrowed $50,000 on a reverse mortgage from Vision Equity taken over by Bank of Scotland. Two years ago I applied for more but had to go to Bankwest, I got $10,000 but had to pay exit fees and application fees and my property had then been valued down to $310,00. With interest my mortage is now $87,000. Through my broker I recently applied for another loan but have been refused. I assumed that the percentage went up with age. Due to circumstances some beyond my control, my two credit cards have reached their maximum and I am
finding it difficult difficult to pay them and the bills which are increasing all the time. Can you give me any advice please?

lorraine greensill November 2, 2012 at 6:27 pm

I am making inquiries on behalf of my brother,who is aged 62years of age and owns his home outright,He is on a disability pension and is in desperate need of cash to see him through his retirement years.could you please reccomend a reliable reverse mortgage company that he can apply to.He was wanting to go through Homesafe via Bendigo bank,but as yet they are unable to help him due to the fact that it is not available in his suburb.I await your reply.
regards Lorraine Greensill

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