Experts argue reverse mortgages often are being used today for all the wrong reasons. Seniors now have less home equity, less savings, and more debt.
"This was originally contemplated as something you could draw money from over a long period of time, as a way of supplementing your income or providing income when you had not others. Now a lot of people are looking to reverse mortgages as a quick fix," said David Certner of AARP.
About 9.5 percent of the 775,000 reverse mortgages outstanding are delinquent, far higher than the rate on regular mortgage loans. While lenders are pushing them aggressively, fewer are being made today, due to the drop in home values. Advocates say they can be a valuable tool, if used correctly, and that there are ample safeguards.
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"The reverse mortgage, unlike any other financial service in the United States, requires every single borrower, prospective borrower to go before an independent third party reverse mortgage counselor at a HUD-approved, HUD-funded counseling agency prior to even making an application for the loan," claimed Bell. "So where somebody is coming off title would be in a discussion."
The Consumer Financial Protection Bureau is now looking at new rules to protect consumers, which could include stricter supervision of lenders and more transparency for borrowers.
"It's a balancing issue, you want to make sure that people have access to credit or the help they need or even those who may need a reverse mortgage, but you also want to make sure that one, people not getting reverse mortgage when it's not the right product for them and two that when they are getting the product they are getting the best one that's available for them," explained Certner.
Those changes could go a long way to help seniors benefit from the loans, but they would likely be too late for Robert Bennett.
"I guess I could make it somewhere else, but I would walk away empty."
—By CNBC's Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC
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