Why are the fees so much higher than conventional loans?

The general fees for a reverse mortgage are for the most part the same with one major exception. The FHA gets about 40% of the fees front; this is in the form of mortgage insurance. This guarantees your credit line and payments. Recently a large mortgage company from Pasadena, CA closed its doors. They also are involved in reverse mortgages, because of the insurance all the seniors are protected. Additionally, there are reasons such as: NO INCOME, CREDIT, EMPLOYMENT, OR HEALTH REQUIREMENTS. The MIP (Mortgage Insurance Premium) makes the program available as the lender has NO CASH FLOW from the mortgage. The lenders average exposure is about $200,000 with no return for years. This naturally can be higher based on age or region of the country such as California, Hawaii, and Alaska. Tenure payments are only offered in the reverse environment. These are the monthly payments that a senior can receive as their benefit. Many banks and credit unions have frozen their home equity lines ...  more