Reverse mortgages on the rise, bankers say

WASHINGTON, Dec. 8 (UPI) -- The Federal Housing Administration's recent limit increase on reverse mortgages has increased interest in the loans, U.S. bankers said.

"A lot of people rely on liquidating their portfolios over their lifetime to supplement their income. Now they're asking if there's a way to use the equity in their home instead of selling their portfolio in a bad time," Frontier Bank's Jerry Dawson said, the Seattle Times reported Monday.

The FHA raised the limit to $417,000 recently, from $352,790.

More than 100,000 reverse mortgages, which are not repaid while the borrower stays in the home, have been taken out this year, the Times said.

"It's going to allow those people who own higher-priced homes to access a lot more of the equity of their homes for whatever need they may have," said Darryl Hicks, associate director of the National Reverse Mortgage Lenders Association in Washington.

A reverse mortgage is a way to use the equity of a home as an annuity, with the debt on the home increasing in correlation with the size of the loan.