Reverse Mortgage not so popular'Reverse Mortgage', a product aimed at the senior citizens in the country seems to have failed to take off, due to various reasons.
05 Dec 2008
'Reverse Mortgage', a product aimed at the senior citizens in the country seems to have failed to take off, due to various reasons.
Presently, 20 finance companies, including banks and home loan lenders have processed 550 applications. Rs 350 crore have been lent against reverse mortgages.
To deal with the lack of demand for this product, National Housing Bank (NHB) has planned to tie up with HelpAge India, a non-government organisation helping older people.
NHB will set up counselling centres for senior citizens, to popularize the product.
While two counselling centres are in operation in Delhi and Hyderabad, other centres will be set up in Kolkata, Chennai, Mumbai, Chandigarh, Pune and Bangalore.
There are various reasons being cited for the failure of this product, such as initial confusion in tax treatment of the loan.
Another reason attributed is the reluctance of mortgaging a property for various reasons, emotional attachment being one of them. A NHB official quoted in media reports said that a major hurdle for this product is the 'social fabric' and the 'existing concept of relationship'.