The announcement by the Rudd government yesterday that reverse mortgages will be regulated federally through ASIC is a welcome development for consumers. How will this help in a practical sense? It will mean that ALL brokers and organisations selling and advising on these products MUST be licensed and properly qualified. Whilst many reputable groups, such as Seniors First, already meet already meet the standards that regulation is likely to require, the fact is that the current system does not demand all operators comply. Although the vast majority of mortgage brokers do the right thing, there is undeniably a small element of shonky operators. The regulation should weed these guys out, and reduce the risk of getting ripped off or poorly advised.
The down side to this announcement is that the regulation is not likely to take effect until late 2009. So what to do in the meantime? Should you hold off taking from taking a reverse mortgage until then?
The quick answer is no. Just be careful who you deal with. Check that your broker or adviser has the following:
If you are unsure or would like guidance, contact Seniors First on 1300 745 745.
{ 3 comments… read them below or add one }
Good to know that there is a company like Seniors First whose people are already properly trained and regulated.
“The Government has indicated that it may also look at regulating reverse mortgages”
Ref: http://www.aar.com.au/fsr/news/index.htm
This does not sound like a solid statement to me, hopefully the draft bill will be a little more clear.
It would be a good idea for the Government to phase out the
compound interest on reverse mortgages. Why not?